Price Oracle

Price oracles are data feeds that provide a reliable reference price for a perp asset. Combined with funding rates, they serve to align the perp price with the reference price of the asset.

Ventuals constructs and publishes oracle prices for each market using an equal 50/50 weighting of:

1. The latest external valuation estimate based on industry-leading offchain data sources

   1. Data comes from Notice; you can read about their sources and methodology here

2. The 8-hour incremental EMA of the mark price

$$P_{\text{oracle}} = 0.5 \cdot P_{\text{Notice}} + 0.5 \cdot \text{EMA}_{8h}(\text{MarkPx})$$

Notice data is polled at least once per minute and incorporates offchain valuation data, such as: secondary transactions, secondary bids and offers, official fundraising announcements, mutual fund marks, 409A valuations, and a group of relevant public companies.

The combined value is pushed onchain as the oracle price, and used in funding rate calculations. E.g. if the Notice price = $100, and 8hr mark EMA = $120, then oracle price = $110.

Oracle prices are updated approximately every 3 seconds.

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Why the 50/50 weighting?

Ventuals approaches the oracle price for pre-IPO companies differently than typical crypto perps.

This is because unlike an asset like BTC, there are no highly liquid spot markets for pre-IPO companies. At the same time, there is some real information about the valuation of these companies offchain, from funding rounds and secondary markets.

Our goal for the Ventuals price oracle is to incorporate information from offchain markets, while allowing room for some price discovery — this is a much needed mechanism for private markets, as shown by the “IPO pop” phenomenon of companies instantly trading multiples higher than secondary transactions once they've gone public.