Price/Oracle

We've explained how positions works, and that swaps are executed by external market makers. Now, at the moment of the swap, the tokens' prices are determined by an oracle.

Oracle

In order to determine the price between tokens, we currently use one of three different sources: Chainlink, API3 and Uniswap v3. When a pair is initialized for the first time, we check if the pair is available through (in this order): Chainlink, API3 or Uniswap. If the pair is not available in any of them, then a position can't be created for that pair.

Chainlink

Chainlink Data Feeds provide smart contract developers with access to a secure and reliable source of real-world data to power their unique use cases for DeFi and beyond. You can read more about them on their website.

API3 dAPIs

dAPIs are continuously updated streams of off-chain data, such as the latest cryptocurrency, stock, and commodity prices. They are secure, transparent, and cost-efficient data feeds that connect smart contracts directly to first-party data sources. They are powered by Airnode, the serverless first-party oracle solution developed by the API3 DAO. You can read more about them on their website.

Uniswap V3

Our oracle currently uses Uniswap's V3 pool oracles to determine the correct price. These pool oracles return a time-weighted average price (or TWAP). Our oracle uses a time period that can be between 1 and 20 min.

As a consequence of this approach, only token pairs that have a pool (with at least some liquidity) in Uniswap V3 can be created on Mean Finance.

It is important to mention that this approach works as long as the price in Uniswap V3 pools is reliable.

We recommend that users create positions in token pairs that have a decent amount of liquidity on a Uniswap V3 pool.