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LP-038: Oracle VM

Abstract

The Oracle VM runs the O-chain (Oracle chain), a dedicated chain for decentralized oracle data aggregation. Registered data providers submit price feeds and external data as O-chain transactions. The VM aggregates reports using a median-of-medians algorithm, producing canonical price points that are disseminated to all Lux chains via Warp messages. The O-chain replaces external oracle dependencies (Chainlink, Pyth) with a native, validator-secured data layer.

Specification

Data Feeds

Each feed is identified by a (baseAsset, quoteAsset) pair:

Feed {
    feedID      [32]byte    // hash(baseAsset || quoteAsset)
    baseAsset   string      // e.g., "LUX"
    quoteAsset  string      // e.g., "USD"
    heartbeat   uint64      // max seconds between updates
    deviation   uint256     // min price change to trigger update (bps)
    decimals    uint8       // price precision (e.g., 8 = 1e8)
}

Provider Registration

Data providers stake LUX and register the feeds they serve:

• Minimum stake: 500 LUX per provider
• Feed registration: providers declare which feeds they serve
• Reputation score: rolling accuracy metric based on deviation from consensus median

Report Submission

Providers submit reports as O-chain transactions:

Report {
    feedID      [32]byte
    price       uint256     // price * 10^decimals
    timestamp   uint64      // observation timestamp
    sources     []string    // e.g., ["binance", "coinbase", "kraken"]
    signature   []byte      // provider's signature
}

Aggregation

The VM aggregates reports per feed per round:

1. Collect all reports for feedID within the current block

2. Filter outliers: discard reports >3 standard deviations from the median

3. Compute weighted median, weighted by provider stake

4. Emit canonical PriceUpdate event with the aggregated price

Dissemination

Aggregated prices are pushed to all subscribing chains via Warp:

PriceUpdate {
    feedID      [32]byte
    price       uint256
    timestamp   uint64
    roundID     uint64
    signatures  []byte      // O-chain validator aggregate BLS signature
}

Consuming chains verify the Warp signature and update their local price cache.

Slashing

Providers are slashed for:

• Stale data: missing heartbeat window (lose 0.1% stake per miss)
• Outlier manipulation: consistently submitting prices >2 standard deviations from median (lose 1% stake per offense)
• Downtime: offline for >1 hour (lose 0.5% stake)

Security Considerations

1. Collusion resistance: median aggregation requires >50% of staked providers to collude for price manipulation.

2. Flash loan immunity: O-chain prices are off-chain observations, not on-chain spot prices. Flash loans cannot manipulate them.

3. Latency: O-chain block time is 1 second. Warp propagation adds <500ms. Total oracle latency: <1.5 seconds.

Reference

Copyright

Copyright (C) 2024-2026, Lux Partners Limited. All rights reserved.

Licensed under the MIT License.