Oracle Risk

Risk Description

Oracle risk refers to the scenario in which the reported price of an asset, as provided by an external price feed, diverges from its actual market value at a given moment. Sendit relies on external oracle providers—specifically Pyth and Switchboard—to supply these price feeds. This constitutes an external dependency and introduces a form of infrastructure risk, as it stems from the integration of third-party protocols.

Pyth is a well-established, highly reliable oracle provider with a strong track record and widespread adoption across the ecosystem. It offers robust price feeds for most large-cap memecoins and is considered one of the most advanced and battle-tested oracle solutions in the crypto industry. Given its maturity and proven performance, Sendit defaults to trusting Pyth as its primary oracle source. Notably, other leading protocols such as Jupiter, Kamino, Morpho, Synthetix, and Polymarket also utilize Pyth for price data.

Switchboard, by contrast, is a more recent entrant to the oracle space. It allows users to create custom price feeds by aggregating data from various sources through a modular, plug-and-play architecture. The primary risk associated with Switchboard lies in the accuracy and reliability of the underlying data sources selected for a given feed. If those inputs are incorrect or manipulated, the resulting oracle price may be flawed.

Risk Controls

Each market listed on Sendit includes detailed information about its associated oracle provider, including the specific oracle and price feed IDs. This transparency allows any user to independently verify the oracle data being utilized.

Furthermore, Sendit distinguishes between Verified Markets and All Markets. Upon the creation of a new market, an internal due diligence process is initiated to assess the integrity of the selected oracle. If the market utilizes the appropriate Pyth price feed corresponding to the underlying asset, it will be designated as a Verified Market.

For markets employing Switchboard oracles, a comprehensive review is conducted to evaluate the accuracy and reliability of the selected data sources and the robustness of the resulting price feed. Only markets that meet Sendit's internal standards for data integrity and oracle reliability will be included in the Verified Markets category.