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Oracle Price Feed

Limora uses decentralized oracle price feeds to determine accurate market prices for opening, closing, and liquidating positions. This page explains how the oracle system works.

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Overview

Unlike order-book based exchanges where prices are determined by matching bids and asks, Limora uses oracle-based pricing. This approach offers several advantages:

No Slippage

Trades execute at the oracle price, regardless of position size.

Manipulation Resistant

Prices are aggregated from multiple sources, making manipulation difficult.

Consistent Execution

All trades in a block get the same price, ensuring fairness.

Transparent

Oracle prices are on-chain and independently verifiable.

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Price Sources

Limora aggregates prices from multiple reputable sources:
  • Chainlink: Industry-leading decentralized oracle network
  • Pyth Network: High-frequency price feeds from major exchanges
  • Band Protocol: Cross-chain oracle solution
The protocol uses a median price from these sources to mitigate the impact of any single source being manipulated or experiencing issues.

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Price Feed Architecture

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Supported Price Feeds

AssetSymbolUpdate FrequencyDeviation Threshold
BitcoinBTC/USD1 second0.1%
EthereumETH/USD1 second0.1%
SolanaSOL/USD1 second0.25%
ArbitrumARB/USD10 seconds0.5%
OptimismOP/USD10 seconds0.5%
Price feeds are continuously updated. The table above shows typical parameters which may be adjusted based on market conditions.

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Price Calculation

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Entry Price

When opening a position, the entry price is determined by:
  1. Fetching the latest oracle price at transaction execution
  2. Applying any applicable spread (typically 0%)
  3. Recording the price in the position data

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Mark Price

The mark price used for P&L calculation and liquidations: 
Mark Price = Oracle Price
For most trading pairs, the mark price equals the oracle price directly. For some pairs, a time-weighted average price (TWAP) may be used to smooth volatility.

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Settlement Price

When closing a position, the settlement price is:
  1. The oracle price at the time of the close transaction
  2. Used to calculate final P&L
  3. Determines fund distribution between trader and matcher

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Staleness Protection

To protect against stale or outdated prices, the protocol implements staleness checks: 
require(
    block.timestamp - priceTimestamp < MAX_PRICE_AGE,
    "Price feed is stale"
);
ParameterValueDescription
MAX_PRICE_AGE60 secondsMaximum age of price data
HEARTBEAT10 secondsExpected update frequency
If a price feed becomes stale:
  1. New positions cannot be opened for that pair
  2. Existing positions continue using the last valid price
  3. Alerts are triggered for protocol operators

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Deviation Protection

The protocol monitors for unusual price deviations: 
require(
    abs(newPrice - lastPrice) / lastPrice < MAX_DEVIATION,
    "Price deviation too large"
);
This prevents extreme price swings from triggering mass liquidations due to oracle errors.

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Price Updates and Gas

Oracle price updates are performed by dedicated keeper networks that:
  • Monitor off-chain price sources
  • Submit on-chain updates when thresholds are met
  • Pay gas costs for update transactions
Users do not need to pay for oracle updates; these costs are covered by the protocol.

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Liquidation Pricing

Liquidations use a specific pricing mechanism to ensure fairness:
  1. Trigger Check: Position checked against current oracle price
  2. Grace Period: Brief window before execution (configurable)
  3. Execution Price: Oracle price at liquidation transaction
This prevents front-running of liquidations and ensures traders have fair opportunity to add margin.

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Oracle Governance

Oracle configuration is managed through protocol governance:
  • Adding new price feeds requires governance approval
  • Changing deviation thresholds requires governance approval
  • Emergency pauses can be triggered by the security council

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Monitoring and Transparency

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On-Chain Data

All oracle prices are recorded on-chain and can be verified: 
// Query current price
function getPrice(address asset) external view returns (
    uint256 price,
    uint256 timestamp,
    uint8 decimals
);

// Query historical price
function getHistoricalPrice(address asset, uint256 timestamp)
    external view returns (uint256 price);

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Price Dashboard

Monitor current and historical prices at:
  • On-chain: Contract read functions
  • API: /api/prices endpoint
  • UI: Price charts on the trading interface

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Limitations

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Known Limitations

  1. Update Latency: Oracle prices may lag spot prices by 1-10 seconds
  2. Weekend Gaps: Some assets may have reduced update frequency during low-volume periods
  3. Network Congestion: Base network congestion may delay price updates

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Best Practices

  • Use stop-loss orders to limit downside risk
  • Avoid extremely high leverage during volatile periods
  • Monitor positions actively during major market events

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Technical Integration

For developers integrating with Limora’s oracle system: 
import { LimoraOracle } from '@limora/sdk'

const oracle = new LimoraOracle({
  provider: ethersProvider,
  network: 'base-mainnet',
})

// Get current price
const btcPrice = await oracle.getPrice('BTC')
console.log(`BTC Price: $${btcPrice.toFixed(2)}`)

// Subscribe to price updates
oracle.subscribe('ETH', (price, timestamp) => {
  console.log(`ETH: $${price} at ${timestamp}`)
})

Protocol Overview

Learn more about the protocol architecture.

API Reference

Access price data via API.