Summary
Update the price feed the Frontier oracle uses for valuing the INV token.
Background
Historically, the only price feed used for the INV token was a Uniswap v2 TWAP oracle, originally using the INV/WETH pair on Sushiswap and then being migrated to the INV/WETH pair on Uniswap v2. As painfully discovered in the April 2nd exploit, this TWAP feed was not manipulation-resistant and so a manually adjustable price ceiling was added to the oracle to reduce the ability for an attacker to manipulate the price upwards.
In 2023, the Curve team released new pools that have built-in EMA oracles, which are widely viewed as manipulation-resistant. Tests have shown that at a 10-min EMA, the maximum the price oracle can be manipulated is 4% if an attacker takes over 3 consecutive blocks. These oracles have been audited and battle-tested now for some time, currently already in use by 3 FiRM markets: cvxFXS, cvxCRV and st-yCRV. The new INV price feeds is utilizing this new on-chain EMA oracle, reading directly from the new TricryptoINV pool. This feed reads the INV price in USDC (provided by the pool), then converts this into a USD price by utilizing the USDC chainlink price feed.
Objective
Currently, the INV/WETH pool on Uniswap v2 has $359k of liquidity, with 98.5% of this being provided by the Inverse DAO. The TricryptoINV pool has $602k of liquidity, with 20.3% provided by the TWG. There are currently live debt positions against INV on Frontier, which is why the Uniswap v2 liquidity has been maintained.
After execution of this proposal, the TWG will begin migration 100% of DAO-held liquidity from INV/WETH on Uniswap v2 to the new TricryptoINV pool, winding down INV liquidity on Uniswap v2. Once liquidity is fully migrated, it will be possible for for the final parameter analysis to be conducted that is needed to enable borrowing against INV collateral on FiRM.
New InvPriceFeed: 0xC54Ca0a605D5DA34baC77f43efb55519fC53E78e
On-Chain Action:
- Set INV’s Frontier Market Price Feed Source to 0xC54Ca0a605D5DA34baC77f43efb55519fC53E78e