🫀Heartbeat Service

Heartbeat Service

The heartbeat service can operate under two topologies: centralized or decentralized.

Centralized

• Operates by pooling multiple price oracles via a centralized application, and providing the underlying asset’s median price via direct call to the USDO smart contract.

• Can operate on a fixed, or random timer.

• Wallet costs are offset via the 10% fee allocation from mint/burn operations.

Decentralized

• A standalone smart contract which collects the aforementioned 10% fee allocation from mint/burn operations, which any decentralized user can then claim via submitting a pricing request from the target price oracle.

• Operates based off user incentive, with the intention of the fee/reward incentive allowing for frequent or automated user operation.

Heartbeat-based Limits

The USDO smart contract maintains a minimum heartbeat call requirement, ensuring that the underlying value of any tokens is correctly pegged. We recommend at least a 5 minute timer for any centralized services, or more frequently if affordable on any given chain.

In the event of a heartbeat target being missed, the USDO smart contract assumes a collateralization failure, and applies all relevant actions to its given services.

Finally, each heartbeat cycle should only allow for a set percentage change in supply/collateral on mint, burn, and unstaking functionality. As an example, the amount of liquidity unstaked, or USDO redeemed/burned or minted within a single heartbeat cycle cannot exceed 10% of the total liquidity staked, or USDO in circulation.

In order to prevent against the attack vector of a malicious actor staking/unstaking a large amount of supply per heartbeat to lock users into staking positions, a minimum 24 hour lock on all staked collateral is enforced.