Use of Oracles
Overview
Photon uses Oracles to obtain real-time price feeds necessary for executing accurate pricing of the minting and redemption of PBTC, risk management of delta-neutral positions, and overall system integrity.
The system is designed to apply real-time pricing data from multiple sources to ensure comprehensive coverage and reliability.
The primary sources of price feeds include:
Centralized exchanges
Pyth
Oracle provider proposed and implemented by Photon governance
Key Functions of Price Feeds
Pricing Mint and Redeem Requests: Real-time data from Oracles is used to accurately price PBTC according to the exchange rate for mint and redeem requests based on current market conditions.
Risk Management: Oracles provide necessary data to manage and mitigate risks associated with delta-neutral positions held by the system.
Importance of Real-Time Data
The integrity of the PBTC ecosystem relies heavily on the accuracy and timeliness of the data provided by Oracles. Real-time price feeds ensure that:
Accurate Execution: All minting and redeeming activities are performed based on the most current market information.
Risk Mitigation: The system can swiftly respond to market changes and manage risks effectively.
Transparency and Trust: Users can trust that the pricing and risk management are based on reliable and up-to-date information.
Continuous Improvement
Photon Labs is committed to continually enhancing the resilience and integrity of its Oracle systems. The platform regularly evaluates new low-latency off-chain pricing services to further improve data accuracy and reliability.
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