Proposal to increase security delay for PCE/CPI Oracle from one day to 4 weeks

In advance of the DAO potentially providing SPOT/USDC liquidity to the bill broker as discussed here.

Since the Bill Broker uses the AMPL protocol target price which is acquired through the PCE oracle to determine the rate of the AMPL/SPOT swap rate. The Bill Broker is more sensitive to the live value of the target price than the Ampleforth protocol itself.

While 1 day security delay is enough to avoid critical issues to the PCE oracle for the Ampleforth protocol. The Bill broker would benefit from a higher delay to the update of the live value to guarantee the live value is never compromised due to any potential oracle or oracle providers issues. Hence this proposal is to increase it to 4 weeks. Which practically means PCE data used would be lagging by 1 month, which doesn’t not have a negative impact on the protocol operation, specially as the average value of the last 3 months is used and not only the latest month.

3 Likes

The Bill Broker computes SPOT FMV as:
spot_exchange_rate * ampl_target

To get the AMPL target price, it reads the same CPI oracle that the Ampleforth protocol uses for rebases. So, while an oracle is involved there is still no reliance on realtime market prices.

However, since the CPI oracle and BB are both owned by the DAO governance timelock, any changes typically take 1-3 weeks to enact. Setting the CPI oracle delay to 28 days seems like a good way to further derisk disruption with minimal side effects.

This change would also have helped in the case last Fall when the BEA revised its historical data. So even outside of the immediate Bill Broker motivations, I think there is benefit to the broader AMPL protocol.

3 Likes

I think it is important to mitagate risk as much as possible - especially with the Bill Broker as it may manage a significant amount of capital in the future.

I dont see much risk in delaying the latest oracle price for a few weeks.

I am in favor of this proposal.

Thanks everyone. Kicked off the snapshot vote: Snapshot

2 Likes

@aalavandhan1894 I think you meant to post in this thread.

Here’s a snapshot vote specifically for the security delay:
https://signal.ampleforth.org/#/proposal/0xd20115f5b2390520aa5a71099c1430cbc696459b5ffd9ab7add0bcf3bdbd46a2

So, if the data lags by a month, does it affect Billy’s ability to arb the market? Let’s say the PCE rate went down by 10% (crazy, but bear with me), and Ample and SPOT prices are going through crazy numbers as well; what does this entail? What if the same is true in the opposite? Is PCE suddenly up by 5%, but is SPOT on a downward spiral?

I am not following how the scenario you are describing would affect or be affected by the target price. Generally as long as the target prices that the rebase policy and the bill broker are reading are relatively close to each other then the Bill Broker should work as intended. The lag from the latest available PCE data doesn’t affect their function.