Stellar Community Fund

By Lightecho Stellar Oracle

Lightecho Stellar Oracle

SCF #16

$93.1K

Legacy v4.0 Award

Awarded

Reliable and Trustworthy Emerging markets and XLM Volatility price feed for Soroban.

Products & Services

Price Oracles serve as an essential element in the next-generation Stellar Soroban smart contract system, which leverages the Rust programming language. They are widely applied in lending schemes that incorporate approaches like overcollateralized loans. Decentralized systems require a secure and reliable way to access external data, especially when it comes to financial data that impacts decision-making within the applications. Since blockchain networks are typically isolated from the outside world, price oracles act as a bridge between off-chain data and on-chain applications, ensuring accurate and trustworthy information for users and developers. Major oracle disruptions could endanger billions of dollars stored in Soroban-based agreements. Recognizing the focused risks is crucial, as the ever-expanding assortment of projects within the system typically hinges on a few price oracles. A breakdown in even one of these oracles might trigger a catastrophic ripple effect throughout the entire ecosystem. As a result, the seamless integration of dependable and secure price oracles is crucial for the success of Stellar Soroban.

We previously developed LightEcho.io, an aggregator that compiles pricing data from various sources, including Decentralized Exchanges (DEXs), Centralized Exchanges (CEXs), Instant Exchanges (ICE), and Peer-to-Peer (P2P) exchanges. It collects data from over 50 sources. This platform showcases Stellar pricing information. For this project, we aim to create two distinct types of oracle contracts within the Stellar Soroban ecosystem: An embedded oracle, in which all prices are stored inside the contract data on-chain, and the prices can be obtained at any time by invoking the contract function directly from another contract. A callback-based oracle, in which a price is requested alongside a contract ID for receiving the price later, then a backend aggregator (off-chain) detects the request via getEvents, and invokes the receiver contract, passing the price as a parameter to the function being invoked. The sources of the prices that are fed into those contracts will be decentralized, meaning there will be multiple sources, each one controlled by a different trusted market data providing company or exchange. It's on the consumer (of the contracts) to decide which price source to rely on when retrieving a price. For the centralized pricing systems we will both investigate using the pricing model from CME and use a hybrid model taking the best of Maker Dao and Cornell University's "Town Crier" model.