Price Oracles

Chainlink secures the protocol from pricing attacks

Stablecoin Pricing

OUSD is designed to stay pegged at 1 USD and be 1:1 backed with its underlying stablecoins. This is trickier than it sounds because these underlying stablecoins are constantly deviating from their own desired 1 USD pegs. While the majority of daily fluctuations are minor, there have been major swings in price that have occurred in the past and are likely to occur again in the future.
Coin
Low
High
Delta
Source
USDC
$0.929222
Mar 13, 2020
$1.11
Oct 15, 2018
$0.180778
USDC
$0.924188
Aug 02, 2020
$1.17
May 08, 2019
$0.245812
CoinGecko
DAI
$0.945505
May 10, 2020
$1.11
Mar 13, 2020
$0.164495
DAI
$0.903243
Nov 25, 2019
$1.22
Mar 13, 2020
$0.316757
CoinGecko
USDT
$0.849809
Feb 02, 2017
$1.21
May 27, 2017
$0.360191
CoinGecko
USDT
$0.572521
Mar 02, 2015
$1.32
Jul 24, 2018
$0.747479
The rebasing function treats 1 stablecoin as 1 OUSD for simplicity and to protect OUSD balances from being affected by the daily fluctuations in the price of the underlying stablecoins. Since the rebase function only counts coins, OUSD balances should only increase.
In order to mint and redeem the appropriate number of OUSD on entry and exit, the smart contracts need to accurately price the USDT, USDC, and DAI that is entering and exiting the system.
As an added precaution, OUSD never pays more than a dollar for a stablecoin, nor sells a stablecoin for less than a dollar. In situations where DAI, USDC or USDT fall below the $1 peg, OIP-4 disables minting of additional OUSD tokens using the de-pegged asset. Oracles giving wrong prices will not result in a reduction of the number of stablecoins held. Gains that are collected as a result of stablecoins slipping from their peg are redistributed to the remaining holders of OUSD in the form of additional yield.
As a decentralized protocol, OUSD must rely on non-centralized sources for these prices. OUSD uses Chainlink oracles for pricing data for DAI, USDC, and USDT. You can read more about our decision to work with Chainlink on our blog. The specific Chainlink oracles being utilized are listed in the Registry.

Liquid Staking Token Pricing

Similar to the rebasing function in OUSD that treats 1 stablecoin as 1 OUSD for clarity, OETH employs the accessible Chainlink oracles to ensure that the protocol doesn’t overcompensate for LSTs which might be traded at a diminished rate. In order to accurately price stETH and rETH as they interface with the system, Chainlink's pricing oracles come into play. For the specifics of frxETH, OETH leans on the Frax Oracle. This oracle integrates data from dual on-chain sources: the EMA oracle stemming from the frxETH/ETH liquidity pool on Curve and the TWAP oracle from the Uniswap frxETH/FRAX pool.
The oracles are just one of multiple security features protecting the vault. You are, however, relying on the Strategists multisig to manually pause deposits in the case of a major depegging of the underlying assets.
Coin
Low
High
Delta
Source
stETH
Ξ0.3356 Dec 24, 2020
Ξ3.0304 Nov 16, 2021
Ξ2.6948
stETH
Ξ0.72793330 Dec 22, 2020
Ξ1.272594 Nov 10, 2021
Ξ0.5446496
Coingecko
rETH
Ξ0.5411 Jun 18, 2022
Ξ2.9001 Dec 1, 2021
Ξ2.359
rETH
Ξ0.69870372 Jun 18, 2022
Ξ3.002089 Dec 01, 2021
Ξ2.30338528
Coingecko
frxETH
Ξ0.8363 Mar 10, 2023
Ξ1.3420 Apr 17, 2023
Ξ0.5057
frxETH
Ξ0.98370559 Nov 23, 2022
Ξ1.015148 Apr 16, 2023
Ξ0.03144241
Coingecko
Oracles that produce inaccurate valuations will not necessarily lead to a diminished number of tokens preserved. Surpluses obtained as a consequence of tokens deviating from their peg are reallocated to the ongoing holders of OETH in the form of supplementary yield.

Reward Token Oracles & Front Running Protection

When reward tokens from the various strategies are sold for additional yield, Chainlink oracles are used to ensure that the sale price slippage has not exceeded normal bounds. The same is also true for OGV buybacks that are executed using a portion of the yield that is generated by the protocol. When minting and redeeming, a minimum required amount can be passed into the contract call to ensure that the entire transaction fails if not enough OUSD/OETH or stablecoins/LSTs would be returned to the user due to changing prices.