Oracle Price Pools

A DeFi evolution revolution

Key details

Chains Arbitrum (more to come)
Oracle Price Pool address 0x04e2a8c9465f46f8ebb71fab035bcf79beef4253
Arbiscan https://arbiscan.io/address/0x04e2a8c9465f46f8ebb71fab035bcf79beef4253
Stablecoin treasury monitoring endpoint http://retail.fluid.ch/gw/open/v1/treasury/DUSD

Fluid Finance and Chainlink have brought an optimized liquidity model to DeFi.

Highlights

  • Designed for trading assets with known prices.
  • Allows buyers and sellers to trade in DeFi without the price impact of a typical AMM curve.
  • Improves capital efficiency for liquidity providers.
  • Creates a new class of low-risk crypto LP staking rewards.
The better banking model for a better world

The problem

Fluid wanted to offer its users a stable price to purchase ETH. However, the ETH – DUSD price in the pools that the company created on SushiSwap varied depending on the liquidity in the pool and the size of the trades. Fluid wanted stable pricing for users while also keeping a pool in the crypto world, to facilitate on and off ramping from traditional finance.

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The solution

The Fluid team has a long relationship with Chainlink and knew that they could provide a price feed for ETH in US dollars. Since Fluid itself guarantees that its DUSD stablecoin on the crypto side can always be redeemed for the exact same amount of US dollars in a bank account with Fluid on the traditional side, the company was in a unique position to offer ETH – USD trades.

The result was to integrate a Chainlink oracle into a pool with Fluid, at the intersection of traditional finance and crypto. Essentially, Chainlink replaced a price curve with their price feed. As Fluid’s pools are used for on and off ramping, and not for price discovery, this presented a solution that was the best of both worlds.

Instant liquidity would be available for normal on and off ramp amounts from funds provided by:

  1. Fluid
  2. LP providers from crypto.
The better banking model for a better world

Welcome to Oracle Price Liquidity!

  • For individuals and companies.
  • Instantly.
  • Globally.

It’s more than an evolution for crypto.
It’s a revolution.

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It gets better

Oracle Price Liquidity Pools offer advantages to crypto LP stakers that don’t currently exist.

LP providers in crypto can provide single-sided liquidity (e.g. ETH – DUSD, ETH – DEUR) in an extremely safe environment with known prices through the Chainlink feed. For this liquidity provision, they earn 0.25%.

Fluid wanted to offer users the best on- and off-ramp in crypto while eliminating price impact. The incorporation of a Chainlink price feed solved this problem.

The better banking model for a better world

Here is how Oracle Price Pools work

Oracle Price Pools have two main functions:

  1. They allow users the fastest and easiest way to on and off ramp from crypto.
  2. They allow users to swap between tokens with known prices.

The main advantage over other DeFi pools: no price impact.

 

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Watch a video about how Oracle Price Liquidity Pools work

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What it means for DeFi

By bringing Oracle Price Pools to DeFi, Fluid and Chainlink provide trading options that don’t exist elsewhere, particularly for assets whose price is well-known. For example, the ETH – USD price is established in many markets and is provided on-chain by Chainlink’s price oracles. Since Fluid’s DUSD is 1:1 backed by USD in a bank account Fluid and Chainlink intend to provide a stable price environment for transparent, backed stablecoins quoted against crypto assets.

In addition, as a stable price environment and trust are required for mass adoption, Fluid and Chainlink hope that the development of their Oracle Price Pools will encourage more users to try crypto products.

The better banking model for a better world

What is coming

Fluid and Chainlink have started with the largest trading pair in crypto: USD and ETH. However, this is just the beginning. Fluid has the ability to create bank accounts in up to 32 currencies.

Fluid and Chainlink plan to roll out these additional currencies over the course of the year, offering users globally a seamless integration of a bank account with access to crypto in a huge range of currencies, not just the US dollar.

At the moment, Fluid and Chainlink started with Oracle Price Pools on Arbitrum, a layer 2 scaling solution for Ethereum. The digital dollar, DUSD, has also been tested on Polygon and Ethereum mainnet. Fluid and Chainlink also intend to offer Oracle Price Pools on other chains.

Frequently Asked Questions

How do you guarantee that there is no price impact when buying or selling ETH through your pools?

We take our pricing from Chainlink oracles, so there is a “single point” price.

By contrast, most pools in DeFi are based on price curves. This means that there are many price points, along a curve. While these kind of price curves may be useful for price discovery for rare or volatile assets, they are not optimal for assets with well-known prices.

Similar to how some exchanges have created an optimal price curve for low volatility assets (such as stablecoins), Fluid and Chainlink have created an optimal mechanism for exchanging assets that are well-priced elsewhere.

Is there price slippage with your pools?

Yes. Well, price impact is typically much more important, the concept of price slippage refers to when a price might change slightly because of market movements independent of the amount of a user’s purchase. This is normal and you can select a slippage tolerance.

How do I buy ETH from Fluid’s Oracle Price Pools?

Fluid’s Oracle Price Pools allow you to buy ETH without any price impact.

 

Here are the steps to buy AETH from Fluid’s Oracle Price Pools:

 

  1. Connect to Fluid’s web app.
  2. Select Swap.
  3. Swap DUSD for ETH.

 

You can also interact directly with the smart contract for Fluid’s Oracle Price Pools on Arbitrum, here: 0x04e2a8c9465f46f8ebb71fab035bcf79beef4253

What is the fee for swapping on Fluid’s Oracle Price Pools?

0.30%

Why should I buy ETH on exchanges that have a negative price impact, if I can buy from Fluid’s pools with no negative price impact?

You shouldn’t.

Will you be adding additional currencies to your pools?

Yes. We will be adding up to 32 different currencies that will be exchangeable against ETH.

Will you be adding additional types of assets besides ETH?

Yes. We will be adding stocks (like DTSLA, DAAPL, etc.) soon, followed by indices, derivatives, and other similar real world assets in the future.

Can I provide liquidity to Fluid’s Oracle Price Pools?

At the moment, we are beta testing having third parties supply liquidity to our pools. If you hold Fluid tokens and are interested in supplying meaningful amounts to the pool with lockups, you can enquire about access through our Private Banking program.

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