How is the ETH rate calculated on the Timvi platform?
What is the main issue with creating a crypto-collateralized stablecoin? It is mainly connected to providing the current price for the crypto assets that collateralize the smart contracts. The deposit value is not determined by any particular person but is determined as a result of a continuous process of comparing supply and demand from different sources.
These sources can be:
• decentralized exchanges;
• centralized exchanges;
• aggregators.
Relatively small volumes of currencies are traded on decentralized exchanges, so their price is easier to manipulate. While the trading volumes are small, these decentralized exchanges are not enough to determine the stablecoin price.
Centralized exchanges do win in terms of trading volume. However, the data of any of them may be compromised, and therefore the reliability of such a source is to be questioned.
A compromise solution is the use of aggregators, which estimate an average weighted rate on various exchanges. One of these aggregators is Chainlink. Chainlink is a system of decentralized oracles that provides a ready-made reliable solution without any restrictions to this problem.
This is why we connected out smart contracts to Chainlink and thus solved one of the main issues when creating a stablecoin. The rate is updated every 15 minutes by sorting exchange rates from reputable sources. During this process, transactions with the highest and lowest rates are discarded. Those left are used to determine the average rate. This average rate is then used in our service.
You can see the visualisation of the data delivery process here:
