Risk Management Oracle for Decentralized Finance
Current DeFi Infrastructure
Yield farming project #492812
A project that mitigates liquidation cascades
Source: XKCD #2347
Creating Debt
Liquidating Debt
LTV
LTV
Debt Curve
Slippage effect
High slope in the cumulative debt curve results in high risk of cascades
Liquidations are essential for a healthy DeFi Ecosystem
However, accumulated liquidations can lead to cascades
This problem is not isolated per protocol, but system-wide instead
Multi-chain Protocol Debt Monitoring
Aggregate all liquidations per asset price
How NADIR works
On-chain Data
User Liquidation Prices
Risk Management Oracle
ETH price
MATIC price
Total liquidated
Total liquidated
Apply slippage model and predict cascades
Turning Debt information into Liquidation Insights
Slippage Model
Debt Curve
Slippage Movement
Slippage model in TaiKai assets
Oracle to monitor full market liquidation status
Oracle
Output Example
Smart Contract
Request_id
Oracle Answer
NADIR API
Multi-chain Protocol Debt Monitoring
Aggregate all liquidations per asset price
On-chain Data
User Liquidation Prices
Risk Management Oracle
ETH price
MATIC price
Total liquidated
Total liquidated
Apply slippage model and predict cascades
Parameter Recommendation
Post Hackathon Improvements
+ Lending Markets
Custom protocol liquidation mechanics
Cascade modeling improvements
A price movement of 50% can
lead to a further 1.3 Billion losses from cascades, just in ETH
(~52% Compound TVL)
A Risk Management Oracle to mitigate liquidations cascades, Cross Protocol, Cross Chain