Native Price Oracles

United Protocol has a native price oracle to support asset exchange rate pricing. Validators are required to participate as oracles in order to ensure the most reliable and accurate pricing for assets. In order to maintain freshness of oracle pricing, voting windows can be configured to be as small as 1 block long, resulting in rapid price updates and fresh asset pricing.

In the vote step for a voting window, the validator provides their proposed exchange rates for that window. At the end of the voting period, all of the exchange rate votes are accumulated and a weighted median is computed (weighted by validator voting power) to determine the true exchange rate for each asset.

There are penalties for non-participation and participation with bad data. Validators have a miss count that tracks the number of voting windows in which a validator has either not provided data or provided data that deviated too much from the weighted median. In a given number of voting periods, if a validators miss count is too high, they are slashed as a penalty for misbehaving over an extended period of time.