The following article is a guest post submitted by Delphi Labs Ltd. (“Delphi Labs”). In accordance w
Delphi Labs is proud to present an analysis on price oracles for derivative assets.
In this piece, we’ll analyze pre-existing assumptions on price oracles for derivative assets within the context of DeFi lending protocols. Specifically, we’ll discuss why using the underlying asset’s price as the oracle for a derivative asset is generally a bad practice that should be avoided. While we’ll focus on two types of derivative assets — bridged assets and liquid staking derivatives — a similar analysis could be generalized for any type of derivative asset.
If you’re a DeFi builder or part of a protocol and have any feedback or ideas, please reach out to us; we want to hear from you!