Upgrade market activation to default whitelisted off-chain assets/indices to a Chainlink oracle
This proposal seeks to simplify the process of market activation for implementing a Chainlink oracle for off-chain assets and indices (specifically for the purpose of this post, XAU) where the oracle is already readily available from Chainlink.
Much like eIP 22, this proposal seeks to streamline the process for tokens where a corresponding chainlink feed already exists.
Currently the process for activating a market for an asset (example: xAUT) defaults to the UniV3 Price feed as an oracle, which then needs to pass a governance proposal to switch to a chainlink feed (based on discussions in the discord).
This is not optimal nor safe for various reasons, chiefly, low liquidity in the UniV3 pool and the corresponding risk of price manipulation.
I propose this process be streamlined to allow chainlink feeds on activation for a basket of pre-approved assets, lowering the barrier to market creation for off-chain assets and indices with a current feed.
Current market activation defaults to the corresponding uniV3 pool as an oracle source. In the context of XAU, this is not optimal nor safe, as the UniV3 pool has low Liquidity for xAUT. A default to a Chainlink price feed would make the activation process less cumbersome, safe and streamlined.
From discussions in the discord, it seems the process as it currently stands is:
- Activate market for xAUT with UniV3 price feed
- Create a proposal to upgrade to a Chainlink feed
- Once passed, implement the ChainLink feed
I propose the new process be:
- Activate a market for a whitelisted asset (xAUT) which defaults to the corresponding price feed where available (XAU).
XAU is the forex representation of GOLD.
AU: Chemical element for GOLD.
The price of XAU represents the current market price for 1 ounce of gold.
xAUT is the Tether representation for XAU. xAUT is redeemable for 1:1 ounce gold, and therefore, closely corresponds the market price of XAU.
Specification & Implementation:
If passed, the activation process will be streamlined for implementing a whitelisted basket of assets (eg. XAU) with corresponding chainlink price feeds, rather than following the cumbersome process above.