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 asset using an equal 50/50 weighting of:
An external valuation estimate based on industry-leading offchain data sources
The 8 hour EMA of the last day's minutely mark prices (Hyperps model)
The offchain data sources update every 24 hours and incorporate a variety of inputs, such as: secondary transactions, secondary bids and offers, official fundraising announcements, mutual fund marks, 409A valuations, and peer group comparisons.
The combined value is pushed onchain as the oracle price, and used in funding rate calculations. E.g. if the offchain price is $100, and the 8hr perp EMA is $120, then the oracle price will come out to $110.
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, and at the same time, leave mathematical room for price discovery — a much needed mechanism for these markets, as shown by the “IPO pop” phenomenon of companies instantly trading multiples higher than secondary transactions once public.
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