Oracles

Bluechip markets

Pyth is D8X's oracle for bluechip markets

D8X utilizes the decentralized Pyth oracle network for bluechip markets, 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 Pyth?

D8X only uses oracles for bluechip 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).

Non-bluechip markets

ODIN is D8X's oracle for non-bluechip markets

For non-bluechip markets (e.g., prediction markets, low-liquidity altcoins, etc.), D8X is primarily using its own oracle network ODIN.

Bluechip vs non-bluechip markets

• Bluechip assets are traded on multiple exchanges and have markets that are characterised by deep liquidity. Manipulating bluechip spot markets is generally costly. Multiple oracle providers provide high quality data for those markets.

• Non-bluechip markets are heterogenous. In general those assets are only traded on a few exchanges and markets are characterised by low liquidity. Manipulating those spot markets is relatively cheap. Often no oracle provider is providing price data for such markets.

How does D8X utilize ODIN?

Like for bluechip markets, D8X sources spot-index prices from ODIN.

In addition to spot-index data, D8X also sources risk relevant data on specific non-bluechip markets. This data is used by D8X's perpetual future engine to accurately price perpetuals on such markets. By incorporating risk relevant parameters into D8X's pricing approach, D8X can mitigate risks inherent to those markets.

Fallback and benchmarking: Stork network

To manage oracle risk, D8X uses stork network as a fallback solution as well as to benchmark data accuracy of spot price series.