🔮Decentralised Oracles
Last updated
Last updated
The decentralised oracles interact with the DLC by providing timely and accurate market data. This data directly influences the conditions under which the Bitcoin is either kept locked or unlocked.
Oracles fetch price data at predefined intervals from a predefined set of trusted sources.
They submit this data to the blockchain, where it is immutably recorded and made available to the DLC.
Example:
Oracles are configured to pull price data every 3 minutes from exchanges like OKX and Binance.
This data is processed and a consensus price is determined based on a decentralised aggregation method via smart contracts.
The agreed-upon price is broadcast to the network and specifically to the DLC and other spoke counterparts, which reacts according to its predefined conditions.
If a significant price drop is detected and confirmed by the oracle data, the DLC executes a conditional clause to adjust the collateral, either by requesting additional Bitcoin or initiating a partial liquidation process.
Multi-signature wallets and advanced cryptographic techniques are employed to enhance the security of transactions and data.
The flexibility of public keys and the dynamic nature of the locking/unlocking mechanism ensure that the system adapts to security requirements in real-time.
This enhanced detail about DLCs and decentralized oracles illustrates the sophisticated interaction between blockchain technology and real-world data inputs, ensuring that our lending protocol remains robust, flexible, and secure. These dynamic components are critical for managing risk and responding effectively to market conditions, protecting both borrowers and lenders in our ecosystem.
