This follow-up report reassesses the wstETH/USD Chainlink Oracle based on its testnet performance between September 27 and September 29, 2024. We aim to determine if the updated oracle feed shows improved accuracy in reflecting on-chain prices and whether we can proceed with its implementation using the previously recommended parameters.
Test 1: Comparison of wstETH/USD Chainlink Oracle to Derived On-Chain Price Using Curve Pool Data
Description: In this test, we compare the wstETH/USD Chainlink oracle price stream to a derived price calculated using:
- The wstETH/stETH multiplier from the Lido contract.
- The stETH/ETH price from the Curve stETH/ETH pool on Arbitrum, which is the primary on-chain source of stETH liquidity.
- The ETH/USD Chainlink price stream.
Test 2: Comparison of wstETH/USD Chainlink Oracle to Prices Derived from Uniswap V3 wstETH/wETH Pool on Arbitrum
Description: This test compares the wstETH/USD Chainlink oracle price stream to a price derived from:
- The wstETH/wETH price from the Uniswap V3 pool on Arbitrum, which is a key on-chain source of wstETH liquidity on Arbitrum.
- The ETH/USD Chainlink price stream.
Conclusion and Recommendation
The lower deviations across both tests compared to our initial analysis suggest that the updated Chainlink oracle feed has improved in accuracy. However, it’s important to note that the test period was relatively short and lacked significant market volatility.
Given the current results, we recommend moving forward with the Oracle, using the fee structure outlined in our previous post, which we will provide again below. We will revisit the performance after a longer period of testing on mainnet and provide updated recommendations if necessary.
Recommendations
Based on our analysis, we recommend the following parameters for the swap pools:
| Pool | Swap Fee (Negative) | Swap Fee (Positive) | Price Impact Factor (Negative) | Price Impact Factor (Positive) |
|---|---|---|---|---|
| wstETH/wETH | 30 bps | 30 bps | 1e-8 | 5e-9 |
| wstETH/USDe | 25 bps | 25 bps | 1e-8 | 5e-9 |