Oracles
Oracles are an external source of data which provide pricing information or other related data regarding cash flow settlements and risk/margins.
External price feed data is accepted by fxdx "as is" and governance has no right to modify incoming data or insert price data points into the vault. Simultaneously, the vault relies on the availability of appropriate pricing data to achieve a settlement. Suppose the external oracle fails and cannot provide the required data. In that case, the vault will maintain a state that prevents users from exchanging unequal amounts of primary assets or complementary assets as collateral. The governance of the deal should have the right to withdraw particular security from the vault. In contrast, the protocol ensures that any time during the vault's lifecycle, users can use the same number of primary assets and complementary assets, to call the refund function to get a fixed amount of basic collateral.
If the market knows the fair settlement price, but has not yet delivered it to the vault, we expect this price to serve as a focal point in trading the associated derivatives. In other words, users should be able to acquire primary or complementary assets in the amount that makes their portfolios symmetric. As well as swap into the collateral through the refund function with the symmetric quantities.
Suppose users are unable to obtain their lost assets on the open market. A smart contract can be created (symmetrical refunds). Which allows groups of users that agree to a fair settlement price, to trustlessly pool their primary and complementary assets, then exchange them for collaterals again.
TWAP is used to calculate the funding payment at the end of each hour
  • The price is only used to calculate the funding rate, which significantly reduces the risk of price manipulation
  • Using TWAP adds another protection layer to prevent tampering
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