What are oracles?

D8X utilizes the decentralized Pyth oracle network, which provides up-to-date spot prices to the D8X smart contracts.

Responsibilities of an oracle

  • Updates, stores, and distributes up-to-date prices relevant to the system.

How does D8X utilize oracles?

D8X only uses oracles for spot-index prices, similar to how centralized exchanges like BitMEX uses spot reference index prices (i.e., indices BitMEX aggregates from different spot exchange price sources). Like BitMEX, D8X does not require any other external price input.

Perpetual price discovery (i.e., determining the deviation from the spot price) happens on D8X fully on-chain, while for centralized exchanges like BitMEX this price discovery happens through their order book. The pricing approach implemented by D8X’s AMM generates characteristics that are very similar to the patterns observed in order-books (e.g., if demand to go long in a given perpetual is high in relative terms, perpetual prices can deviate significantly above spot).

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