Thank you for chiming in. While I find your discoveries hard to believe, I appreciate you coming here to share your perspective.
First, it is widely understood that the market price was $1.03 during this incident. There were millions of DAI available for sale at this price across nearly every exchange in these moments. Can you please comment on how and why the Coinbase Oracle failed to reflect true market value despite three promised layers of protection against off market data?
Specifically I’d like your comment on point #2, off-chain filtering. Everyone knows DAI should trade near $1, and given that it was clear that in this moment, there was a liquidity crisis on Coinbase and Coinbase alone, why was $1.30 allowed to be printed on the oracle? Especially since it was only sustained for a few minutes. The oracle should be smarter.
This is completely unacceptable for Coinbase to be so cavalier about reporting local market prices on an narrow illiquid slice of the market when everyone knows the real purpose of the oracle is to report true market value. Your blog post says as much. Again it states “it is important to address various scenarios in which a data point to be signed does not reflect an actual market price of an asset”.
What sanity checks did the oracle perform? Did it check to see if Coinbase was off-market relative to other exchanges? In this case, every other exchange. I’d like to know how this oracle failure happened. I’d also like a full disclosure of how many accounts participated in driving the price of DAI to $1.30 and keeping it there. Please disclose whether there was anything suspicious or any patterns amongst these accounts.