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Lending Oracles: Overview

There are two main contracts for lending oracles:

  • Oracle from a single Curve pool

    EMA oracle for collateral tokens using a single Curve pool to fetch the price oracle from. The OneWayLendingFactory can automatically deploy this kind of oracle when deploying a new market.

    CryptoFromPool

  • Oracle from multiple chained Curve pools

    EMA oracle for collateral tokens using multiple different Curve pool oracles chained together. This oracle contract can also make use of stored_rates from stableswap-ng pools.

    CryptoFromPoolsRate

  • Oracle from a Curve Pool + Vault

    EMA oracle for collateral tokens using a single Curve pool to fetch the price oracle, which is then adjusted by the redemption rate of a vault.

    CryptoFromPoolVault

Oracle Examples

This sections aims to give examples on the various oracle contract combinations, focusing on CryptoFromPool.vy and CryptoFromPoolsRate.vy.

Single Curve-Pool Oracle (e.g. CRV)

The oracle contract for the CRV market fetches the price oracle from a single Curve pool, the triCRV pool consisting of crvUSD, wETH and wBTC. This oracle can even be deployed automatically using the create_from_pool method on the OneWayLendingFactory.

The CryptoFromPool.vy contract is specifically designed for these types of oracles. Full documentation is available here.

Chained Oracles without Rates (FXN)

This oracle contract utilizes two Curve pool oracles to derive the price of the FXN token relative to the crvUSD token. Importantly, this oracle does not apply any conversion rates; it strictly uses the raw prices provided by the oracles.

The CryptoFromPoolsRate.vy contract is specifically designed for these types of oracles. Full documentation is available here.

To obtain the FXN token price, we use the following two Curve pool oracles:

  1. FXN/ETH pool, which consists of ETH and FXN.
  2. tricrypto-crvUSD pool, which consists of crvUSD, wBTC, and wETH.

The price oracle from the first pool determines the price of FXN relative to ETH. The oracle from the second pool computes the price of wETH in terms of crvUSD. By combining these two prices, we can calculate the final price of FXN relative to crvUSD.1

Let's consider some actual values:

  • price_oracle of FXN/ETH = 43130436331749331
  • price_oracle of ETH/crvUSD = 3011786169374663706441

Calculating the final price:

\[\text{price} = \frac{\text{FXN/ETH} \times \text{ETH/crvUSD}}{10^{18}}\]
\[\text{price} = \frac{43130436331749331 \times 3011786169374663706441}{10^{18}} = 129899651623057139817\]

This final value represents the price of FXN in terms of crvUSD by chaining together two oracles. All values are based on a scale of 1e18; hence, 129899651623057139817 would approximate to 129.71 crvUSD per FXN token.

Chained Oracles with Rates (pufETH)

The oracle contract for the pufETH lending market integrates two Curve pool oracles and applies the stored_rates from the pufETH/wstETH pool due to the nature of the tokens.

The CryptoFromPoolsRate.vy contract is specifically designed for these types of oracles. Full documentation is available here.

The pufETH/wstETH exchange rate is nearly 1:1. We take this exchange rate and multiply it by the wstETH/crvUSD rate obtained from the tryLSD pool. This calculation provides the price of pufETH in terms of crvUSD. Note: This is not the actual price of pufETH due to the operational mechanics of stableswap-ng pools. To ascertain the accurate and final price of pufETH, we must apply the stored_rates.

The final price of pufETH is calculated as follows:

  1. Retrieve the pufETH/wstETH exchange rate (e.g., 0.99, where 1 pufETH is equivalent to 0.99 wstETH).
  2. Obtain the wstETH price with respect to crvUSD from the tryLSD pool.
  3. Multiply these values to calculate the oracle price of pufETH in terms of crvUSD.
  4. To derive the complete price, apply the stored_rates from the stableswap pool, as provided by the oracle contract.

stored_rates

Specific tokens have a rate which is denominated against another asset. For example, wstETH has a rate against stETH as the token can always be redeemed for a certain amount of stETH based on the rate. At origin, wstETH and stETH were 1:1, but as time passed and wstETH earned yield, the underlying amount of stETH increased. So, for example, after 1 year, 1 wstETH would be worth 1.1 stETH. Therefore, the rate would be 1.1 and is stored in the stored_rates variable in the stableswap pool.

The same applies to ERC4626 tokens like pufETH with a convertToAssets method. This kind of rate is also stored in the stored_rates variable.

The stableswap pool uses these rates to ensure accurate calculations when, for example, exchanging tokens or adding liquidity.

  1. The price_oracle method in each pool always returns prices relative to the token at index 0 within the pool. For example, in the tricrypto-crvUSD pool, crvUSD is at index 0, wBTC at index 1, and wETH at index 2. Thus, price_oracle(0) returns the price of wBTC with respect to crvUSD, and price_oracle(1) returns the price of wETH with respect to crvUSD. More on oracles can be found here. ↩