Velodrome is a blockchain oracle specializing in providing off-chain data to smart contracts. It was founded in 2020 by a team of blockchain enthusiasts. The name "Velodrome" is derived from the cycling track, symbolizing the speed and accuracy of data transmission. Its purpose is to enable smart contracts to access external data sources, making them more versatile and useful in various applications.
Velodrome is a blockchain oracle solution that offers several benefits compared to its direct competitors. One of the key advantages of using Velodrome is its high scalability. Velodrome can handle a large volume of data, making it suitable for enterprise-level applications. This scalability sets it apart from its competitors by ensuring that it can support a growing ecosystem without compromising on performance.
Another benefit of Velodrome is its robust security features. With its advanced cryptographic mechanisms, Velodrome ensures the integrity and authenticity of data. This level of security is crucial in blockchain applications that rely on accurate and trustworthy information.
Velodrome also offers flexibility in terms of data sources. It supports multiple types of data feeds, including on-chain and off-chain sources. This versatility allows developers to choose the most appropriate data source for their specific use case.
Additionally, Velodrome provides timely and reliable data updates. With its efficient data delivery system, Velodrome ensures that users have access to real-time information, reducing the risk of outdated or inaccurate data affecting smart contract execution.
Compared to its competitors, Velodrome stands out for its comprehensive features, scalability, security, and flexibility. These advantages make it a compelling choice for developers and enterprises seeking a reliable and efficient blockchain oracle solution.
Velodrome is a decentralized derivatives trading platform built on the Ethereum blockchain. It leverages blockchain technology and smart contracts to facilitate efficient and transparent trading.
At its core, Velodrome utilizes the concept of Perpetual Swaps, which are contracts between two parties that allow them to swap the returns on an asset without having to actually buy or sell the asset. These contracts are settled in cryptocurrency, typically in Ether (ETH).
To ensure the accuracy and reliability of the price data used for trading, Velodrome relies on blockchain oracles. A blockchain oracle is an external information provider that supplies verified data from outside the blockchain to smart contracts. These oracles fetch real-time price information from various sources and feed it into the Velodrome smart contracts, enabling seamless price discovery and trading.
The functioning of Velodrome involves multiple components working together harmoniously. Traders can deposit their funds into the platform's smart contract, where the funds are securely held. Orders are then matched through an automated market maker, ensuring liquidity and efficient trading.
Velodrome also implements an innovative feature called "dynamic fees," where the trading fees are adjusted based on the platform's overall trading volume. This mechanism encourages higher liquidity and rewards active traders.
Overall, Velodrome offers a decentralized alternative for derivatives trading, empowering users with transparency, security, and accessibility through the utilization of blockchain technology and smart contracts.
DIA utilizes a comprehensive approach to collect trade data from various DeFi and NFT exchanges. The process varies depending on the type of exchange being referred to.
For centralized exchanges like Coinbase, Kraken, and Binance, DIA employs scrapers that directly collect trades from the exchange databases. This is achieved using Rest APIs or WebSocket APIs. The frequency of data collection varies from 1 to 7 seconds, depending on the exchange. By retrieving trading data as close to the source as possible, DIA ensures high precision and accuracy.
In the case of decentralized exchanges, DIA takes a different approach. It collects data from various blockchains by subscribing to swap events in liquidity pools. By retrieving trading data directly from the blockchain itself, DIA enhances the accuracy of the data. Examples of decentralized exchange sources include Uniswap, curve.finance, and PancakeSwap.
When it comes to NFT marketplaces, DIA captures live trading data by retrieving information from integrated marketplace smart contracts. The retrieval period for NFT marketplaces ranges from 20 seconds to 1 minute, allowing DIA to cover all NFT transactions happening in real-time. By avoiding unreliable bids and offer data, DIA ensures precise data from the broader NFT market. Notable NFT integrated exchange sources include Blur, X2Y2, OpenSea, and TofuNFT.
Through this comprehensive data management strategy, DIA is able to provide highly accurate and customizable price feeds sourced from a wide range of exchanges, both centralized and decentralized.
DIA utilizes a process to compute trade data from Velodrome and build price feed oracles for different types of exchanges, whether they are DeFi or NFT.
For DeFi exchanges, DIA employs a two-step process. First, the trade data is subjected to data cleaning and outlier detection. This step ensures that trades with prices significantly different from the current market price are excluded, preventing market manipulation or errors from distorting the price estimation. By applying an Interquartile Range (IR) filter, DIA removes data points and sets that fall outside an acceptable range relative to the interquartile range. This filtering step helps maintain the accuracy and reliability of the price data.
Next, DIA applies a price determination methodology to calculate the final price from the remaining data points. One example of a methodology used is the Volume Weighted Average Price (VWAP), which takes into account the volumes of trades. Trades from the queried time range are collected and weighted by their volume to determine the average price. DIA also offers other trade-based price determination methodologies, such as the Moving Average with Interquartile Range Filter (MAIR), which weighs trades against volume and calculates the average price for each second in the time range.
For NFT exchanges, the process is different. DIA determines the floor price of an NFT collection by processing the on-chain trade data in two steps. First, the data goes through cleansing filters to exclude market outliers and manipulation techniques. Then, a pricing methodology is applied to determine the final price point.
The simplest methodology for NFT floor price determination is the Floor Price, which provides the lowest sale price recorded on the blockchain during a given time window. However, DIA offers advanced methodologies, such as the Moving Average of Floor Price, which returns the moving average of a collection's floor price. These advanced methodologies can be tailored to specific use cases by customizing parameters like the length of the average or the size of the floor window. Filtering mechanisms, such as the interquartile range outlier detection filter, are applied to ensure more realistic and reliable NFT floor prices, preventing manipulative techniques like wash trading from distorting the prices.
Overall, DIA's process of computing trade data from Velodrome and building price feed oracles involves data cleaning, outlier detection, and the application of various price determination methodologies, depending on the type of exchange. These processes aim to provide accurate and reliable price data for cryptocurrencies, NFTs, LSTs, and more.
Instead of distributing pre-calculated data feeds, DIA covers the whole data journey from individual trade collection, and computation to the last mile of the feed delivery.