Oracle

Price feeds are crucial within the financial markets, as they not only ensure that assets are accurately valued within a platform, triggering liquidations or stop-loss actions, but also enable frictionless value exchange. Conversely, price manipulation can have negative impacts on the market, including malicious arbitrage transactions, malicious liquidations, and stablecoin de-pegging, all of which sacrifice user interests for profit.

Therefore, within the JayX platform, we employ two types of price feeds to ensure the accuracy and reliability of prices: Index Price and Oracle Price.

Index Price

The Index Price is calculated based on the weighted trading volume and spot prices from several major exchanges, and it is frequently updated within short intervals. It is used for funding rate calculations, the calculation of unrealized profit and loss (PnL), or the triggering of conditional orders.

Oracle Price

The Oracle Price is primarily used for triggering liquidations and ensuring that user orders do not deviate from the market price. Typically, the Index Price is a component of the Oracle Price.

To reduce the risk of price manipulation, decentralized price feeds are used as the price input function within our nodes, with sources such as Chainlink, Pyth Network or Stork Network.

Spot transactions on the order book are less susceptible to manipulation as they are conducted at prices agreed upon by buyers and sellers. However, the risk of price manipulation may increase when AMMs are used to fulfill orders that have not been fully matched due to a lack of liquidity. In these instances, utilizing an Oracle Price can effectively protect against potential malicious arbitrage attempts targeting these orders.

For derivatives or contracts trading where leverage is used and transactions are often internal to the platform, the implementation of an Oracle Price feed that draws from various trusted sources enhances trading confidence by providing a more robust and manipulation-resistant pricing mechanism.