Entangle's Price Oracle is Live!
Entangle is proud to announce the launch of its Price Oracle, crafted through 18 months of intensive market research to tackle the critical challenges within the crypto industry. Our aim is to enable broader crypto adoption by bridging traditional and emerging markets with a trustless and customisable tool. The future of reliable digital asset pricing is here.
What Is a Price Oracle and How Does It Work?
A price oracle is a system that provides essential price information for various assets in the cryptocurrency market. Think of it as a real-time price feed that gives you the current value of cryptocurrencies or tokens. In the context of LP tokens - which you can consider as shares in a liquidity pool - the price oracle tells you how much your shares are worth at any given moment.
For a price oracle to work effectively, it needs to gather a large amount of price data from various sources. This data is typically sourced from decentralized exchanges (DEXs) where these tokens are actively traded. The oracle then processes this data to deliver a single, reliable price point that can be used across different blockchains.
How It Simplifies a Complex Process
To determine the price of tokens, particularly 'Liquidity Staking Derivatives' (LSD) in LP tokens, our price oracle performs several critical steps. It starts by compiling a comprehensive list of pool tokens that are linked to each LP token. It then aligns the prices of these pool tokens against a stable currency, like USDC, to provide a consistent price measurement.
After collecting price data from various DEXs, the oracle uses an algorithm to calculate a fair price. This often involves finding the median price from all sources to prevent outliers from distorting the price. By doing this, the oracle simplifies the otherwise daunting task of tracking and verifying the price of your crypto assets across multiple platforms.
Benefits of Using the Entangle Price Oracle
The launch of our price oracle provides a suite of functionalities that address previous pain points in the crypto world with practical use cases.
For instance, during the infamous flash crash incidents where a single exchange's price deviation could trigger a cascade of automated sell-offs, our oracle could have been the stabilizing force. By pooling price information from a variety of decentralized exchanges, it establishes a market average that dampens the impact of inconsistencies from any single source. This composite price feed could prevent automated systems from making erroneous trades based on skewed data, which has been a common issue in the past.
In situations akin to the DeFi summer of 2020, where the rapid emergence of new tokens led to high volatility and unreliable price feeds, our oracle's real-time updates would be a game-changer. The accurate price information would enable traders to make informed decisions among the new increase of tokens, potentially mitigating losses due to lagging or inaccurate data.
The oracle also promotes transparency and could play a critical role in preventing manipulated pricing strategies. In cases where certain market players might attempt to inflate or deflate prices through a single exchange - a practice known as "slippage" or "pump and dump" - our oracle's aggregate pricing approach can curb the influence of such activities, offering a democratized and accurate price reflection.
Inter-blockchain operability comes to the forefront when considering the multi-chain exploits that have occurred. By relaying consistent price information across different blockchains, our oracle aids in harmonizing price disparities that could be exploited for arbitrage, reducing the risk of such attacks.
Lastly, the Entangle oracle could significantly impact liquidity management, especially during market downturns when liquidity tends to dry up. By providing reliable liquidation rates, it would enable liquidity providers and investors to make timely decisions, potentially reducing the risk of being caught in unfavorable positions.
To back our ambitious developments we have over 60+ partnered protocols inside the Entangle ecosystem who will benefit from this customizable messaging solution. Integrate the Entangle Oracle to improve your DApp’s reliability with us.