Oracle

Oracles

Oracles provide real-time price data that powers Zentra's core functions: collateral valuation, liquidation triggers, and interest rate calculations.

What Are Oracles?

Oracles are external data feeds that bring off-chain information (like asset prices) onto the blockchain. Zentra relies on oracle price feeds to:

• Calculate collateral values

• Determine borrowing power

• Trigger liquidations

• Display accurate APYs

The Flow:

1. External Markets (exchanges, OTC, DEXes) provide price data

2. Oracle Network aggregates, validates, and publishes prices

3. Zentra Protocol uses prices for valuation, liquidation, and display

Why Oracles Matter

Accurate Collateral Valuation

Your Borrowing Power = Collateral Value × Collateral Factor

Example:

• If oracle shows wcBTC = $50,000:

  • 1 wcBTC collateral × 75% = $37,500 borrowing power

• If oracle is wrong (wcBTC actually $45,000):

  • Protocol may allow over-borrowing → Risk of bad debt

Liquidation Accuracy

Health Factor = (Collateral × Liq Threshold) / Debt

Oracle price directly affects Health Factor:

• Price drops → HF drops → Liquidation risk increases

• Wrong price → Wrong liquidations (or missed liquidations)

Oracle Architecture

Multi-Source Aggregation

Zentra uses aggregated price feeds that combine data from multiple sources to ensure accuracy and manipulation resistance.

Example:

• Source 1: $50,100

• Source 2: $50,050

• Source 3: $50,080

• Source 4: $50,070

• Aggregated (median): $50,075

💡 Outlier rejection: If Source 5 reports $45,000, it's excluded as an outlier.

Update Frequency

Asset	Update Trigger
wcBTC	Price deviation > 0.5% or every heartbeat
USDC	Price deviation > 0.1% or every heartbeat

Heartbeat

Regular updates ensure prices stay fresh even during low volatility.

Network	Heartbeat
Citrea	Every block / configured interval

Security Measures

Price Manipulation Protection

Measure	Description
Multi-source	No single source can manipulate price
Time-weighted	Historical averaging reduces flash attacks
Deviation limits	Extreme price changes trigger review
Fallback oracles	Backup sources if primary fails

Circuit Breakers

If price change > X% in Y minutes:

1. → Pause affected market

2. → Alert protocol guardians

3. → Manual review before resuming

Supported Assets

Current Price Feeds

Asset	Oracle Source	Denomination
wcBTC	Aggregated feed	USD
USDC	Aggregated feed	USD

Price Derivation

For wrapped assets, prices may be derived:

wcBTC Price = BTC/USD price × wcBTC/BTC peg

Example: If wcBTC trades at 0.998 BTC:

• wcBTC = $50,000 × 0.998 = $49,900

Oracle Failure Scenarios

Scenario 1: Stale Price

Item	Details
Situation	Oracle hasn't updated in 1 hour
Impact	Prices may not reflect current market
Response	Protocol may pause new borrows until fresh data

Scenario 2: Price Spike

Item	Details
Situation	Oracle reports 50% price jump
Impact	Could trigger mass liquidations
Response	Circuit breaker pauses, manual verification

Scenario 3: Oracle Downtime

Item	Details
Situation	Primary oracle network unavailable
Impact	No price updates
Response	Fallback oracle activates automatically

Governance & Updates

Oracle Changes

Action	Governance Requirement
Add new price feed	Governance vote
Change oracle source	Governance vote
Adjust deviation thresholds	Governance vote
Emergency pause	Guardian multisig

Monitoring

Metric	Monitoring
Price freshness	Automated alerts
Deviation from market	Cross-check with external sources
Update frequency	On-chain logs

FAQ

Q: What if the oracle price is wrong?

Multiple sources and aggregation reduce this risk. Extreme deviations trigger circuit breakers for manual review.

Q: How often do prices update?

Prices update when they deviate beyond a threshold (0.5% for most assets) or at regular heartbeat intervals.

Q: Can oracles be manipulated?

Multi-source aggregation and time-weighted averaging make manipulation extremely expensive and difficult.

Q: What happens during a flash crash?

Circuit breakers may pause liquidations temporarily. Time-weighted prices smooth out brief anomalies.

Q: How do I check current oracle prices?

Prices are visible on the Zentra dashboard and can be queried directly from the oracle contracts.

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By combining community‑voted oracle contracts with proven technologies like Chainlink and Correlated Asset Oracles, Zentra ensures transparent, secure price feeds for all reserves.