[TOB-SANDCLOCK-6] use Liquity USD/ETH oracle (chainlink + tellor backup) #101
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coolhill
commented
Jul 21, 2023
coolhill
commented
Jul 21, 2023
coolhill
commented
Jul 21, 2023
coolhill
commented
Jul 21, 2023
coolhill
commented
Jul 21, 2023
coolhill
commented
Jul 21, 2023
coolhill
commented
Jul 21, 2023
coolhill
commented
Jul 21, 2023
| @@ -23,7 +23,7 @@ | |||
| uint256 public totalProfit; | |||
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| IStabilityPool public stabilityPool = IStabilityPool(C.LIQUITY_STABILITY_POOL); | |||
| IPriceFeed public lusd2eth = IPriceFeed(C.CHAINLINK_LUSD_ETH_PRICE_FEED); | |||
| IPriceFeed public usd2eth = IPriceFeed(C.LIQUITY_USD_ETH_PRICE_FEED); | |||
Check warning
Code scanning / Slither
State variables that could be declared immutable
fyang1024
approved these changes
Jul 25, 2023
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Description
The LUSD/ETH price feed used by the scLiquity vault is an intermediate contract that calls depricated latestAnswer methods on upstream chainlink oracles. It also connects to upgradable proxie pricefeeds with unclear owners.
Solution
Instead of the intermediate contract use the Liquity USD->ETH oracle which uses Chainlink USD->ETH as a primary and Tellor USD->ETH as a backup and has extra safety checks. Disregard LUSD peg and estimate ETH holdings at LUSD/USD 1:1.
Side-effects
This means we estimate the ETH holdings to be worth as many LUSD as it is worth USD (as if LUSD is pegged 1:1), disregarding current market value/peg of LUSD. If LUSD trades at less than USD we would overestimate the total assets and users could redeem at a slight advantage until the keeper sells the ETH for LUSD. If the LUSD trades above the dollar then we would under-report the total holdings until the keeper rebalances into LUSD.
Since ETH is to be traded into LUSD asap and ETH total would only be a small temporary portion of the total holdings this is an OK compromise. Depending on the Liquity USD->ETH oracle is preferable to the previous intermediate contract that connects to upgradable proxies with unknown owners.
Previous Liquity oracle bug
Because of the complexity in the dual-oracle Liquity design there was a bug in the Tellor fallback functionality. However it has been fixed. Using the same oracle for scLUSD as is used for LUSD makes sense and a bug in LUSD or its oracle cannot be avoided anyways, since we fundamentally depend on LUSD as our underlying.
Rundown on different oracles