Oracles

What are oracles?

Zest Protocol smart contracts need to know the prices of the various assets supplied on the protocol. For this resason, lending protocols rely on oracles to provide price feeds for assets.

Zest Protocol utilizes the industry-leading Pyth oracle network to provide up-to-date token price data to to its smart contracts. Pyth was incubated by Jump Trading and is one of the most reliable oracle networks in the crypto industry. It doesn't get more robust than Pyth

Responsibilities of an oracle

• Updates, stores, and distributes up-to-date token prices relevant to the system.

• Ensures UI always displays the latest prices for listed assets on Zest

• Make sure loan liquidations are accurate and efficient

Oracle Integration

Zest Protocol uses Pyth Oracle to source real-time token prices, relying on its strong security features for accurate pricing and reliable risk management.

The protocol's smart contracts regularly fetch and update price data for all listed assets, ensuring up-to-date information is reflected in the UI and enabling smooth, precise, and efficient liquidations.

To ensure price accuracy, Zest Protocol incorporates several key safeguards:

• Staleness Protection: Price staleness occurs when an oracle provides outdated data. To mitigate this, Zest enforces stricter staleness limits than Pyth, with a maximum allowed price age of 3 minutes.

• Confidence Intervals: Pyth includes confidence intervals with their price feeds, reflecting potential variation in asset values. Zest takes a cautious stance when valuing assets and liabilities:

  • For assets, the lower bound of the 95% confidence interval is used.

  • For liabilities, the upper bound of the 95% confidence interval is applied.

This approach ensures conservative, risk-aware pricing throughout the protocol.