Oracles
Antimatter does not relay on any oracles
Oracles play an important role in defi applications and are sources of many forms of attacks. Antimatter designs an innovative way to abandon the use of oracles to secure the system and maintain systematic independence.
In Antimatter, arbitrage activities will act as "oracles" to make sure price of call and put tokens follow the trend of market price movement of target assets.
Flash loan allows investors to borrow and return significant amount of money without interest rate within one transaction block. Flash loan attack can have devastating effect to the exchange(platform). Here is an example: one can first borrow a large amount of asset A from the protocol. He swaps asset A to asset B, so that the price of asset A will decrease. He then use the swapped asset B as collateral and borrow more asset A. This could be achieved because the price of asset A has decreased. After he returned asset A, the difference in the amount is his profit. It seems profitable but it will ultimately drain the pool since the above process can happen every block. Asset A and B can be contracts too. Contract trading always includes inherent leverage, so the effect can be magnified, which is detrimental to the platform. Certainly with flash loan, one can arbitrage and wash trade, but stabilizing the platform is of more importance.
A large number of protocols uses oracle. Oracle is used to receive Defi-related data from other platforms. The use of oracle can sometimes cause trouble to the protocol. Suppose that it takes 1 second to display the price of a certain cryptocurrency. Within 1 second, the price changes and one smart trader realizes this change. He then can open position and take advantage of the pricing lag. The drawback of the delay can cause trouble in extreme volatile market. If one pumps and dumps a certain asset, the execution price will be unfavorable to other traders because of this lag. Since the decentralized exchange generally exhibits prices slower than the centralized exchange, a delay in the price display is unfavorable to contract trader. A simple example is that the trader's position may have been liquidated before he realizes the price change. Antimatter platform, however, does not rely on oracle. The pricing mechanism can stabilize itself.
Last modified 1yr ago