Oracles: Pyth and SEDA

On YEX Perps markets, oracles are the safety boundary. They define what the system considers “true” for marking, risk, and settlement, so neither traders nor the House can win by manipulating a single venue.

This is especially important for HIP‑3 index perps: they’re easy to quote and hedge at scale only if the index is robust.

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Architecture

Component	Role	Responsibility
Pyth	Data source	High‑quality real‑time feeds
SEDA	Aggregator	Combines Pyth + other sources into a composite rate
Pyth Relayers	Relayer	Listens to SEDA output and updates HIP‑3 oracles
Oracle Updater	Executor	Calls SetOracle with the composite rate

1. Raw sources: Pyth publishes onchain feeds; additional venue signals (e.g., mark prices) can be included.

2. Aggregation: SEDA computes a robust composite rate (weighted blend + guardrails).

3. Relay: decentralized relayers push the composite rate to HIP‑3.

4. SetOracle: the oracle updater commits the value used for OraclePx/MarkPx/ExternalPerpPx.

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Design principles

Fast path // safe path

• Fast path: low‑latency reference for quoting and UX.

• Safe path: conservative reference for liquidation triggers and settlement.

Safety

Oracle inputs are wrapped with

• outlier filtering

• staleness checks

• confidence/uncertainty handling

• circuit breakers / safe‑degrade behavior

Why this matters to the House

The Agentic Binned‑liquidity Manager (ABM) uses oracle context to

• tighten spreads when safe,

• widen and reduce size when risk rises,

• avoid being run over by adverse selection.

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Practical note

Oracles are risk references, not guaranteed executable prices. In extreme volatility, markets may trade away from oracle marks; safety systems respond accordingly.