What is a price feed?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 4 min
In short
A price feed is the continuously updated price data an oracle publishes. How often it refreshes, and under what conditions, is a design choice — it is not live by default. If a feed stalls, or the market moves hard between updates, contracts act on a price the market no longer shows.
Key points
- The price data an oracle keeps updating on-chain
- Update frequency and triggers are design parameters
- It is not necessarily the live market price
- A stall or lag distorts liquidation decisions
Definition
The price data for a given asset pair that an oracle continuously writes on-chain, and that smart contracts read to value collateral and settle positions.
Updating a feed costs money: each write is a transaction, so refreshing every second means paying gas every second. Most feeds therefore update when a set interval has elapsed or when the price has moved beyond a threshold. In quiet markets nothing is written and the on-chain value simply stays where it was.
That is harmless most of the time and consequential in a crash. Until the threshold is crossed, the price contracts see lags the market. In a sharp fall, liquidations trigger later than real conditions warrant, which is one reason collateral recovery falls short. The reverse also happens: positions liquidated on a lagging price that the market had already moved past.
It is worth knowing which feed a protocol reads. For the same asset, different feeds aggregate different venues and update on different rules, so their published prices differ. When the collateral value shown in a lending dashboard does not match an exchange quote, this is usually why.
Watch out for
- · If updates stop, contracts keep valuing collateral and testing liquidations on a stale price
- · In fast markets the gap to reality widens, and liquidations fire at unexpected moments
- · Feeds for thinly traded assets can be moved by small trades and are correspondingly easy to manipulate