🧙‍♂️Oracles

Arcanum's Multipools depend on oracle-based prices while executing multiswap that enables every possible operation (e.g mint,burn,swap). Prices are also key data that allows to calculate underlying asset's shares and measure deviation fees. This makes prices being often used and require them to be secure. For underlying assets, uniswap v3 TWAPs are commonly used for price extraction. However there are other option of writing a custom contract that will determine a unique rule of price measuring. Prices are configured by multipool's owner.

Uniswap v3 TWAPs

Time-weighted oracle prices is an on-chain price feed that allows users to extract price from trades that happen inside of a particular uniswap v3 pool. However there price are not vulnerable to manipulations more that any other index prices. This means that malicious user can't pump or dump price and do action in a single transaction using flash loan. However there are still opportunity to waste big capital for pumping and dumping price in a traditional way, but this approach will lead to hudge money loss, so that it won't be beneficial to manipulate price.

Off-chain oracle network

However, there are a special mechanis that allows to put share price of a particular multipool into the contract from off-chain oracles. This mechanic enables tons of optimisations and allows for multipool's fundamental features. Security of this signed price is reached by using a oracle network. Price is passed within set of signatures of the addresses that were whitelisted in multipool by owner. Number of signatures for multipool to approve price is also configurable by owner. Generally Arcanum maintains its own oracle network that tracks all multipools and computes their price. Arcanum also charges portion of base fee from ETF created by other users called developer fee. This fee is used to compensate maintenance of oracle infrastructure. However, any owner can create it's own oracle system that suits multipool's api and maintain it standalone. Arcanum's oracle network tend to become a permissionless nodes network that will provide ETF specific data and signed prices. This network will be fully decentralized and will have it's own tokenomics that allows price validators to earn by providing signed prices.