LINK Oracle Report

Summary

Using our risk framework and Uniswap V3 price impact tool we give LINK a strong oracle rating.

This report is related to eIP 6.

Methodology

For maximum security of the oracle, it needs to fulfil 3 criteria:

  1. Liquidity is provided over the full price range
  2. Elevating the TWAP (Time-Weighted-Average-Price) to a meaningful extent is impossible or extremely costly.
  3. Depressing the TWAP to a meaningful extent is impossible or extremely costly.

For more in-depth research on the nature of attacking TWAPs, check out Michael Bentley’s research paper and Seraphim Czecker’s video explanation .

Analysis

Full Range

https://info.uniswap.org/#/pools/0xa6cc3c2531fdaa6ae1a3ca84c2855806728693e8

LINK/WETH appears to have full range liquidity (non-zero% is 100%) provided by a multitude of liquidity providers (64895 initialised #).

Cost of Attack

We have analysed the cost of moving the TWAP of XYZ/WETH by 20% up and down over 1 to 10 blocks. The results are:


This shows that manipulating the TWAP over a 1-2 block attack (the most realistic for an attacker) would cost at least $639 million, which is clearly not feasible.

Conclusion

Given the presence of full-range liquidity and substantial cost of attack, we give the asset above a strong oracle rating.

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