⬜️ Oracle Guard

Protecting our herd from price divergence

Greater growth comes with higher risk. To protect our fellow Camels from the dangers of the market, such as potential price manipulation, flash liquidation, and market failure, Camel Finance has set a bodyguard: Oracle Guard.

How do Oracle Guard works?

To be specific, when the price of an asset in one’s farming pair has its on-chain price (from the exchange that pair is on) differ more than 5% from the average of a batch of off-chain oracles they verify with, the Oracle Guard enters Protection Mode. It includes disabling liquidations, opening, and closing positions, and adding collateral, which is all to protect users from trading at bad prices and taking an unjust loss.

This is also why the Guard turns off adding collateral; After all, Since the LP tokens need their paired assets to be in a 50:50 ratio, the protocol would have to swap some of that added collateral to achieve this even ratio, which would happen at a bad price. So this too is a situation where the Guard is protecting you.

In summary, we hope you have enjoyed meeting your Camel bodyguard, protecting your assets from external threats.‌ Hence, if you ever find the Oracle Guard in Protection Mode, you can rest assured that your assets are secured from any external factors until the markets realign because that’s the Oracle Guard’s job: standing guard over the herd, watching, and protecting all you young Camels.