# wstETH Oracle Report

**URL:** <https://forum.euler.finance/t/wsteth-oracle-report/139>\
**Category:** Oracle Reports\
**Created:** [May 11, 2022, 5:40pm UTC](https://forum.euler.finance/t/wsteth-oracle-report/139 "2022-05-11T17:40:51Z")\
**Posts on this page:** 1\
**Page:** 1

<div class="post-metadata">

**Author:** ![seraphim](https://yyz1.discourse-cdn.com/flex007/user_avatar/forum.euler.finance/seraphim/32/33_2.png) [@seraphim](https://forum.euler.finance/u/seraphim)\
**Post date:** [May 11, 2022, 5:40pm UTC](https://forum.euler.finance/t/wsteth-oracle-report/139/1 "2022-05-11T17:40:51Z")

</div>

# Summary

Using our risk framework and Uniswap V3 [price impact tool](https://oracle.euler.finance/)we give wstETH a strong oracle rating.

This report is related to [eIP 11.](https://forum.euler.finance/t/eip-11-promote-wsteth-to-collateral-tier/133/9)

# 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](https://github.com/euler-xyz/uni-v3-twap-manipulation/blob/master/cost-of-attack.pdf) and [Seraphim Czecker’s video explanation](https://www.youtube.com/watch?v=snwUwj3QQ7M&t=1s&ab_channel=EulerFinance).

# Analysis

## Full Range

**Linear Chart:**

 ![image](https://canada1.discourse-cdn.com/flex007/uploads/euler/original/1X/699458c46a514916ee2c0ff0c4ffd792632a8f82.png)

**Logarithmic chart:**

 ![image](https://canada1.discourse-cdn.com/flex007/uploads/euler/original/1X/a877f070dd1961c7632ac22cbe9f6fdc511498e1.png)

[https://info.uniswap.org/#/pools/0xd340b57aacdd10f96fc1cf10e15921936f41e29c](https://info.uniswap.org/#/pools/0xd340b57aacdd10f96fc1cf10e15921936f41e29c)

Overall, wstETH/WETH has full range liquidity (non-zero% is 100%) and liquidity is provided by a multitude of liquidity providers (147 initialised #).

In fact, if we use the logarithmic version of this chart, we can see that there is somewhat more liquidity on the downside than upside of wstETH/WETH. While there is substantial liquidity on both sides, this partially explains why manipulating the price higher is cheaper than lower. (more on this below)

## Oracle Sponsorship

In fact, 3 instances of liquidity provision is a result of lobbying FTX ventures, Jump and other key DeFi participants to provide and lock in substantial liquidity as a public good. By making this liquidity semi-permanent, we add another layer of security to the oracle.

By doing this we are hopefully setting the precedent of oracle sponsorship to prevent manipulation.

## Cost of Attack

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

 ![image](https://canada1.discourse-cdn.com/flex007/uploads/euler/original/1X/f81a280c12fb6dd8f0bdc581a5e0e3417a4419bc.png)

This shows that manipulating the TWAP over a 1-2 block attack (the most realistic for an attacker) would cost at least $2 billion, which is extremely expensive.

## Conclusion

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