Oracles

MachFi ensures the accuracy and reliability of its pricing feeds by integrating multiple decentralized oracles, providing a robust framework for all calculations within the protocol. Rather than relying on a single data source, MachFi aggregates price feeds from multiple oracle providers, ensuring that asset valuations are derived from a diverse set of inputs.

Oracles play an essential role in the functioning of any decentralized lending protocol, as they serve as the bridge between on-chain smart contracts and real-world market data. Accurate pricing ensures that collateral valuations are correctly determined, which is fundamental to maintaining appropriate loan-to-value (LTV) ratios and protecting both borrowers and lenders. Oracles also dictate when liquidations should occur, ensuring that undercollateralized loans are settled efficiently while minimizing unnecessary liquidations due to erroneous price fluctuations. Furthermore, dynamic interest rate models rely on precise asset pricing to maintain balanced liquidity and prevent market distortions.