# The Blockchain Oracle Problem in Decentralized Finance--A Multivocal Approach
## 4 Oracles in Decentralized Finance
### Stablecoins  
To better exploit the advantages of the new financial services offered by DeFi, it is crucial to rely on means of exchange with a stable value [85]. Unlike common cryptocurrencies (e.g., Bitcoin and Ethereum), which are extremely volatile, stablecoins maintain almost constant value over time. Stablecoins are usually pegged to the value of an external asset such as gold, but a majority are linked to the US Dollar. Depending on how the system is linked to the stable value, different kinds of stablecoins can be distinguished. _Custodial stable coins_ are crypto-assets whose stable value is guaranteed by an external authority. The most known stable coins are Tether (USD-T) and USDC, which mainly operate on Ethereum blockchain and are managed respectively by Tether Operations and Centre Organization [86; 87]. Companies that manage stablecoins are generally in charge of guaranteeing the asset's value by the deposit (through a bank or another trusted entity) of the equivalent in dollars, gold, or other financial assets [85]. For example, to mint one million dollars of USDC, the same amount in dollars or assets must be locked within the trusted entity. Those stable coins are recognized as crypto assets in the sense that they can actively interact with other cryptocurrencies through smart contracts and exchanges, but like fiat currencies, their use can be censored, seized, and limited by the issuing authority [46]. By definition, custodial stable-coins require trust in an institution that guarantees the pegs to a certain asset. For that reason, blockchain oracles are not required to derive the price of custodial stable-coins. On the other hand, market congestions or downturns may determine temporary deviance from the pegged value. _Non-custodial collateralized stable coins_ are crypto-assets whose value is not guaranteed by a centralized entity and, most of the time, are managed by a Decentralized Autonomous Organization [17]. DAI is, for example, a non-custodial stable-coin whose value is guaranteed by the deposit of a collateral (mainly Ethereum) whose volatility is exploited to stabilize the value of the asset. For example, after the deposit of $150 of ETH in the appropriate smart contract, it is possible to mint $100 of DAI. If ETH rise in price, then more DAI are minted to stabilize their value. On the other hand, if ETH price decreases, a proportional amount of DAI is burnt [88]. Unlike custodial stable-coins, non-custodial are open and censorship-resistant, but due to the over-collateralization rules (usually 150%), the total issued amount is generally lower [46]. Other examples of non-custodial stable-coins are sUSD and USDJ. Non-custodial stable coins, being untied by external entities who guarantee the asset's value, require oracles to verify the exchange rate between the stable coin and the collateral. Surely, the most interesting case is the MakerDAO Oracle. As extensively explained in Gu et al. [32], the MakerDAO oracle had a major change for which it can be distinguished in V1 and V2. In MakerDAO V1, the collateral for DAI stable-coin was only ETH, so that the oracle had to update ETH/DAI price in real time to enforce the collateralization ratio properly. The Maker V1 Governance whitelisted 14 independent, and anonymous price feeds \"to monitor the reference prices across a number of external sources\" [89]. When the DAI/ETH price is to be updated, a price oracle calls a function that indicates _value_, _valid_until_, and _medianizer.addr_. The _value_ is the DAI/ETH claimed exchange rate, the _valid_until_ indicates its expiration time, and _medianizer.addr_ is the contract address of the _medianizer_. The _medianizer_ then aggregates all the value from the price feeds. Of course, the _medianizer_ updates the prices independently on when it receives the prices from the feeds, so it happens that aggregators use price feeds with different expiration times. The MakerDAO V2, on the other hand, brought many innovations to the Maker Protocol. First, it enabled a multi-collateral feature.