3 ms·

For prices you can use Uniswap's oracle which is time weighted average price and can't be manipulated unless you buy a ton of the token over the entire time per

by ikeboy 5y ago

For prices you can use Uniswap's oracle which is time weighted average price and can't be manipulated unless you buy a ton of the token over the entire time period. In this case it was using a Sushi swap oracle (uniswap clone that's on matic) with very liquid pools so it was accurate, just lagged a bit when titan was dropping rapidly.

3np 5y ago
The general consensus is that it's a terrible idea to rely on Uniswap (or any other dex) as a price oracle for valuation/pricing for other on-chain defi applications/dexes. With enough capital (which can be acquired through flash loans) you can absolutely perform economic attacks though atomic transaction chains involving moving the dex price. Uniswap, Kyber, and others will tell you the same thing. This makes me think that even things like DAI/MakerDAO (and anything that relies oracles like Chainlink) can start to get brittle when/if the major price discovery and liquidity are on Dexes. This has been seen in practice, for example in the Fulcrum hack: https://gist.github.com/alexvansande/edcc9fe935b61526766c9563667eb8aa https://gist.github.com/alexvansande/edcc9fe935b61526766c956... https://dappradar.com/blog/defi-flash-loan-attack-what-just-happened https://dappradar.com/blog/defi-flash-loan-attack-what-just-...
- ikeboy 5y ago
  Flash loans are not relevant to the uniswap TWAP oracle, which ignore any transactions in the current block. That oracle was written specifically to be resistant to manipulation and I don't think there's any consensus not to use it.
  - 3np 5y ago
    It's definitely an improvement. Still, I would advise against it in general, especially for arbitrary pairs. This category of attacks can be difficult to foresee and even arise after deployment due to new incentives outside of the system. While Chainlink has its own host of issues and risks, there are still valid reasons why companies are paying them and their node operators good money to feed price contracts for ERC-20 token pairs.
  - acjohnson55 5y ago
    Could you not still use flash loans in attacks that take longer than one block? You'd have to pay the loan back within each block, but it seems like you could still shift markets enough to take advantage, if you were willing enough to take on some risks.
    - nadahalli 5y ago
      That'd be quite expensive. And as you manipulate prices across blocks, arbitrageurs would arb it back to "market price". Uniswap V3 allows for a 3rd party smart contract to ask its Uniswap V3 Oracle to employ a 9 day moving average price - which is of course, not very useful as a "spot price", but is super hard to manipulate.
fogof 5y ago
This actually surprising and doesn't make a lot of sense to me. If the oracle is just an AMM, then presumably one could get the oracle to register a nonzero value by just putting a small amount of money in the contract. As long as there aren't an infinite amount of TITAN tokens (are there?), even if all of the TITAN in existence were put into this AMM, there would still be a little money left to give TITAN a positive price and fix the issue.
- ikeboy 5y ago
  The oracle calculated the price to a certain precision, so it rounded down to 0.
- RhodoGSA 5y ago
  There's a bit more to what happened than the article lets on. The contract mints to provide liquidity (supposedly). There was 1.8m tokens at the time of the crash, now theres 26Trillion. you would need all the capital in the world to get it to .1 now.

by ikeboy 5y ago

3np 5y ago

The general consensus is that it's a terrible idea to rely on Uniswap (or any other dex) as a price oracle for valuation/pricing for other on-chain defi applications/dexes. With enough capital (which can be acquired through flash loans) you can absolutely perform economic attacks though atomic transaction chains involving moving the dex price. Uniswap, Kyber, and others will tell you the same thing. This makes me think that even things like DAI/MakerDAO (and anything that relies oracles like Chainlink) can start to get brittle when/if the major price discovery and liquidity are on Dexes. This has been seen in practice, for example in the Fulcrum hack: https://gist.github.com/alexvansande/edcc9fe935b61526766c9563667eb8aa https://gist.github.com/alexvansande/edcc9fe935b61526766c956... https://dappradar.com/blog/defi-flash-loan-attack-what-just-happened https://dappradar.com/blog/defi-flash-loan-attack-what-just-...

ikeboy 5y ago
Flash loans are not relevant to the uniswap TWAP oracle, which ignore any transactions in the current block. That oracle was written specifically to be resistant to manipulation and I don't think there's any consensus not to use it.
- 3np 5y ago
  It's definitely an improvement. Still, I would advise against it in general, especially for arbitrary pairs. This category of attacks can be difficult to foresee and even arise after deployment due to new incentives outside of the system. While Chainlink has its own host of issues and risks, there are still valid reasons why companies are paying them and their node operators good money to feed price contracts for ERC-20 token pairs.
- acjohnson55 5y ago
  Could you not still use flash loans in attacks that take longer than one block? You'd have to pay the loan back within each block, but it seems like you could still shift markets enough to take advantage, if you were willing enough to take on some risks.
  - nadahalli 5y ago
    That'd be quite expensive. And as you manipulate prices across blocks, arbitrageurs would arb it back to "market price". Uniswap V3 allows for a 3rd party smart contract to ask its Uniswap V3 Oracle to employ a 9 day moving average price - which is of course, not very useful as a "spot price", but is super hard to manipulate.

fogof 5y ago

This actually surprising and doesn't make a lot of sense to me. If the oracle is just an AMM, then presumably one could get the oracle to register a nonzero value by just putting a small amount of money in the contract. As long as there aren't an infinite amount of TITAN tokens (are there?), even if all of the TITAN in existence were put into this AMM, there would still be a little money left to give TITAN a positive price and fix the issue.

ikeboy 5y ago
The oracle calculated the price to a certain precision, so it rounded down to 0.
RhodoGSA 5y ago
There's a bit more to what happened than the article lets on. The contract mints to provide liquidity (supposedly). There was 1.8m tokens at the time of the crash, now theres 26Trillion. you would need all the capital in the world to get it to .1 now.