(Powered by Pyth Network)
Oracles are a crucial component of the BakerFi protocol**,** their primary responsibility is to provide up-to-date token prices data to our smart-contracts. Our protocol rely on this precise information for proper and healthy strategy operation and function.
Our system consume aggregated prices and external data powered Pyth Network.
The oracle is responsible for updating, storing, and distributing up-to-date token prices relevant to the system. It also disables exchange functionality if prices are not fresh and provides functionality to perform exchange rate conversions between currencies.
Overall, accurate pricing is fundamental for maintaining the integrity, stability, and efficiency of BakerFI. It plays a critical role in risk management, preventing undercollateralization, maintaining market stability, fostering user confidence, and ensuring compliance with regulatory requirements.
<aside> đź’ˇ Responsibilities of an oracle on BakerFi
Pyth Network price feeds publish financial market data to multiple blockchains where the BakerFi wants to operate. Pyth's market data is contributed by over 90 publishers, including some of the biggest exchanges and market making firms in the world. Each price feed publishes an aggregate of publisher prices that updates multiple times per second making the prices more accurate specially for DeFi dapps that rely heavily on update prices operate continuously with relevant and updated information.
Pyth Protocol uses an push model that allows any protocol that requires an updated price to initiate a price update based on the accurate Pyth Hermes Network.