Price Manipulation Security

A critical aspect of the protocol is its robust defense against price manipulation. The valuation of LP tokens is governed by a decentralized mechanism. Designated algorithms, referred to as keepers, are tasked with determining the USDC equivalent of one LP token. This derived price is subsequently integrated into the Stream Data protocol.

While the specifics of the pricing algorithm employed by the keepers are partly proprietary, it fundamentally incorporates a blend of Time-Weighted Average Price (TWAP) and Volume-Weighted Average Price (VWAP) methodologies. Following the computation, keepers propose a price. Once a consensus is achieved and a median price is established, the arithmetic mean of all proposals within the median price's slippage tolerance is calculated.

The determined price is securely recorded on the Entangle Oracle Blockchain, providing a robust defense against any attempts at data manipulation. Upon finalizing the data, an event is triggered that outlines the price, enabling keepers to access and disseminate this information across necessary blockchains where such price data is crucial. Moreover, the system is designed to accommodate enhancements, including the integration of advanced hybrid TWAP/VWAP pricing mechanisms, further refining the accuracy and reliability of price calculations.