Oracles

Your health factor is your collateral value divided by your debt, and “collateral value” is not a fact the chain knows on its own. Something has to report it. That something is the oracle, and the market liquidates against what the oracle says, not against what the collateral is really worth, and not against what any exchange is quoting.

So an oracle that reports a price too low can liquidate a healthy position, and one that reports it too high can leave a market holding debt nothing covers. Which oracle a market uses is a property of that market, chosen by whoever deployed it, and DeVOLT reads it rather than supplying it.

The kinds you will see

reporting network

A set of independent parties publishing a price on-chain and agreeing on it. The common arrangement for assets with real markets.

venue internal

The lending venue supplies its own price rather than reading an outside feed.

exchange rate

For collateral that is a claim on something else, such as a staked token or a vault share, the price is derived from how much of the underlying one share is worth. It does not read a market at all.

time-averaged

A price averaged over a window rather than taken instantly, which makes it expensive to push around briefly.

discount curve

For dated instruments that mature at a known value, a price derived from how far away that date is.

What DeVOLT checks, and publishes

For every market it reads, DeVOLT identifies what kind of feed is behind the price, records the history of that price over time, and measures how far it has fallen and recovered in the past. That last measurement is one of the inputs to the risk grade, because how violently a price has moved before is evidence about how violently it can move again.

Where the mechanism cannot be identified it says so rather than guessing a label. A price feed described as something it is not is worse than one described as unknown, because the description is what a reader uses to decide how much to trust it.

Why some markets have none

A market whose price cannot be read is refused for leverage rather than sized on an assumption. That is one of the reasons in the chapter on why a market will not open, and it is the one least worth arguing with.