A quick case study for how Oracle Projects(RedStone) integrates with DeFi projects

Oracles have 2 major types:

1. Push Oracle: Data is regularly sent to the destination chain based on time intervals or price deviations. Popularized by Chainlink, it's used in Lending, CDP, Yield, and other protocols. While simple to integrate, it's not highly scalable due to gas costs.

2. Pull Oracle: Data is delivered upon user interaction with a dApp, with two implementations:

   • Bridge dependent: Users update on-chain data via a bridge, which is easier to scale but reliant on bridge availability.

   • Atomic transaction: Updates are attached to user transactions, enabling gas optimization and native support for various VMs.

In the realm of DeFi, oracles play a crucial role in providing accurate market price feeds to various protocols. Let's explore four different oracle implementations:

Enzyme, an on-chain asset management system, relies on on-chain Oracle data from providers like Chainlink and RedStone to value assets in its Vaults. Similarly, Sommelier, a decentralized asset management protocol, utilizes Oracle price feeds for asset valuation and redemption.

On the other hand, Pull Oracles offer a different approach, as seen in Staple DEX developed by the CIAN team. Staple DEX aims to offer a user experience akin to centralized exchanges by utilizing a Pull Oracle system.

Staple DEX introduces innovative features such as a novel pricing mechanism powered by RedStone Core (Pull) Oracle, a two-layer LP architecture, and a liquidity hyper-allocation mechanism.

Initially focusing on LST and LRT trading, Staple V1 beta is expected to launch on the Ethereum mainnet in February 2024.

Some protocols, like Gearbox V3, initially adopt Push Oracle models but later enhance their capabilities by integrating Pull Oracle systems, resulting in a hybrid approach. This allows Gearbox V3 to accommodate trending and high-return assets while ensuring competitiveness within the DeFi landscape.