Slinky Oracle and Market Mapper Integration

Funding amount

700,000 DYDX (1 year vest) + 500,000 USDC

Start date

April 2024


12 months


This grant will fund the integration, license ownership, and maintenance of Skip’s Slinky sidecar software that will be used to support a new price oracle mechanism and a permissionless market listing system for dYdX.
  1. Price Oracle

At the moment, dYdX v4 uses an in-protocol oracle mechanism that includes each validator gathering price data from centralized exchanges via an API call. In other words, each block proposer acts as an oracle for their block by gathering data across venues and proposing updates prices. This worked fine at first, but is now experiencing some scalability issues as more markets are listed. Through the Slinky sidecar, validators are no longer required to run price fetching and updating as part of their block proposal process. Instead, the sidecar continuously updates prices, and validators agree on the latest price proposed through VoteExtensions (a method of agreeing on additional data through consensus). As a result, market prices can be updated much faster without adding any burden to block proposals while still maintaining economic security (⅔ consensus via VoteExtensions). This should significantly improve price updates and the overall speed of the dYdX protocol.

  1. Permissionless Listing

Today, new markets are listed through governance proposals, which are open to any tokenholder with sufficient capital. Though this worked well initially, the process is slow (at least 4 days) and tiresome (voting and general participation). We’ve recently seen a drop in new markets listed, which we can assume is a result of this overall apathy. Through Slinky’s Market Mapper system, providers can directly feed new markets to the protocol without the need for governance approval. Initially, this will be whitelisted to Skip as the sole provider, allowing them to list new markets at will based on market and community demand. This prevents the listing of malicious markets, and improves overall efficiency. Again, validators will only need to query the sidecar for updates on new markets to be added, which they would all agree on via VoteExtensions.


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