Oracle & Liquidation Design

Aurelia uses a multi-layered oracle system to provide robust and manipulation-resistant pricing across its vaults, lending markets, and DEX:

Chainlink Oracles For major assets (e.g., ETH, USDC, BTC), Aurelia relies on Chainlink price feeds as the primary pricing source. These oracles are decentralized, time-tested, and widely trusted in the ecosystem.
TWAP (Time-Weighted Average Price) Aurelia uses TWAP oracles from integrated DEX pools (e.g., Uniswap v3 or Aurelia DEX) to derive fair average pricing over a 2-hour window. This defends against flashloan attacks, sudden price swings, and low-liquidity manipulation.
Internal Vault NAV Pricing Yield-bearing vault tokens (aurTokens) reflect the net asset value (NAV) of their underlying strategy. Aurelia uses internal logic synced with external oracles to validate the real-time price per share of each vault.
Discrepancy Detection & Circuit Breakers If a significant mismatch is detected between Chainlink, TWAP, or internal pricing, affected markets may be paused via circuit breaker logic to prevent forced liquidations or oracle-driven exploits.

Liquidation in Aurelia is handled in a gas-efficient and risk-aware way, especially for undercollateralized strategies.

Off-Chain Monitoring A dedicated Liquidation Bot Network monitors all leveraged positions off-chain. It tracks user health ratios, debt levels, collateral NAV, and vault-specific risk thresholds using synced oracles.
Trigger Conditions A user’s position becomes eligible for liquidation if its collateral falls below a protocol-defined safety margin. This is determined using TWAP-verified pricing and vault NAV.
Single-Transaction Liquidation When liquidation is triggered, the bot submits a transaction to repay the debt, seize collateral (vault shares), and return excess (if any) to the user. Only pre-approved methods can execute this logic—ensuring no arbitrary liquidation.
Oracle-Gated Safety Checks Every liquidation uses a final oracle sync and slippage control to ensure the trigger is still valid before execution. This prevents front-running or stale oracle exploits.
No Liquidation Auctions Aurelia does not use auctions. Instead, seized collateral is immediately routed through protocol logic (e.g., DEX swaps or vault redemption) and rebalanced automatically.
Position Isolation Each user’s leveraged position is isolated within the LeverageManager. One user’s liquidation cannot cause cascading effects on others. This isolation also helps optimize gas and reduces MEV exposure.

Last updated 5 days ago