Price Feed

The Price Oracle is a smart contract that provides current prices for all assets supported by the CapyFi protocol. These prices are used by the Comptroller for liquidity calculations and liquidation decisions.

Accurate pricing is critical for the protocol's security, as incorrect prices could lead to improper liquidations or allow users to borrow more than their collateral should allow.

The Price Oracle implements several mechanisms to ensure price accuracy and prevent manipulation:

• Price staleness checks to ensure prices are recent
• Price deviation checks to detect unusual price movements
• Multiple price source aggregation for redundancy
• Circuit breakers to halt operations during extreme price movements

For assets using Uniswap V2 as a price source, the protocol uses TWAP calculations to prevent price manipulation. TWAP averages prices over a specific time period, making it much harder to manipulate prices for liquidation purposes.

The TWAP period is typically set to 30 minutes, providing a good balance between price accuracy and manipulation resistance.

Price feeds are updated by keepers who monitor price changes and submit new prices to the oracle. Keepers are incentivized to provide accurate prices through economic mechanisms.

The frequency of price updates depends on the asset and market conditions, but critical prices are typically updated every few minutes to ensure accuracy.

In case of price feed failures or manipulation attempts, the protocol has emergency procedures:

• Emergency pause mechanisms to halt operations
• Backup price sources for critical assets
• Administrator intervention for extreme cases
• Manual price updates by authorized parties