# Lending — openOracle use case

> Liquidations priced by the market at the moment they matter, not by a committee.

Source: https://www.openoracle.org/use-cases/lending

# LENDING

A lending market only needs a price at the moment it matters: when a position is checked for health or seized. That is a settlement problem, not a streaming problem.

Written for Protocol teams and risk owners in this vertical

01 Today 02 What changes 03 Parameters 04 Next

01 // Today

## What breaks today

Pooled lending markets inherit whatever the feed does. A bad print liquidates solvent borrowers, and every market sharing that feed fails together. The price is governed by a signer set or a DAO parameter vote, so the failure is a governance failure, and it is silent until it is not.

### Feed cost vs secured capital

Nobody can scale the cost of corrupting the feed to the capital it secures

### Correlated failure

One feed shared across markets means correlated failure

### Poisoned TWAP history

Manipulating an AMM TWAP poisons a history that keeps affecting later reads

### Silent governance failure

A bad print can liquidate solvent borrowers while the signer set or DAO vote looks fine until it does not

-   001 WETH / USDC ISOLATED
-   002 WBTC / DAI ISOLATED
-   003 WETH / USDT IN GAME
-   004 ARB / USDC ISOLATED
-   005 wstETH / WETH ISOLATED

02 // What changes

## What openOracle changes

The party that wants to act funds the price that justifies acting

> A lending protocol does not need a feed. It needs a price at the moment a position is checked. With openOracle it creates a game for that decision, between the loan’s two tokens and sized against the collateral at stake. The cleanest design makes the liquidator the initial reporter: whoever wants to liquidate posts the price that justifies it, with capital behind it, and anyone has the settlement window to prove them wrong. openLend works this way.

## ONE LOAN. ONE GAME.

POSITION 0x8C…F41 HEALTHY IN GAME

WETH / USDC

Collateral

12.4 WETH

Debt

31,180 USDC

Drift

LTV ▾

03 // Parameters

## How to size it

There is no default configuration. Sizing a game depends on your protocol and its threat model, so start from the attack vectors and economic bounds in the docs.

[PARAMETER REFERENCE ⟶](https://www.openoracle.org/build/integrate#parameters)[PRICE AN ATTACK ⟶](https://www.openoracle.org/security#cost)

Worth knowing before you build

Pooled markets are standing liquidity and cannot choose when they are attacked. A congestion event can price out disputes long enough to snipe them, which is why liquidity floors and base fee limits matter more here than anywhere else.

▸ Reference

[openLend introduction](https://docs.openoracle.org/openlend/introduction) [Price oracle](https://docs.openoracle.org/openlend/price-oracle#how-the-settled-price-is-used) [Liquidate](https://docs.openoracle.org/openlend/liquidate#start-a-liquidation) [Attack vectors](https://docs.openoracle.org/openoracle/attack-vectors#delay-attacks) [Guardrails](https://docs.openoracle.org/openoracle/guardrails#max-slippage)

04 // Next

[On-chain swaps Swaps settled at the oracle price, not at whatever a pool happens to quote. ⟶](https://www.openoracle.org/use-cases/swaps) [Derivatives Opens, closes and liquidations priced by a game sized to the position. ⟶](https://www.openoracle.org/use-cases/derivatives)

[◂ All use cases](https://www.openoracle.org/use-cases)

Reach out to the openOracle team for guidance

[info@openoracle.org](mailto:info@openoracle.org)