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Chronicle's Yield Rate Oracle

Overview​

In collaboration with Block Analitica, Chronicle has developed a Yield Rate Oracle that tracks and delivers the value of the ETH staking yield onchain. This solution is designed to improve the DeFi user experience and reduce governance overhead.

The Yield Rate Oracle is a Schnorr based Oracle with an additional functionality, getAPR() - callable by toll'ed (authorized) addresses.

Purpose​

This Oracle provides lending protocols such as Spark with a safe and automated way to customize the interest rate of ETH and ETH-backed derivatives. It eliminates the need for manual rate setting and updates, which are common in many decentralized lending protocols.

The liquid staking token interest rate derives from Lido's stETH contract. As the largest validator, Lido’s interest rate reduces randomness in block proposal rewards. To smooth out block rewards, a higher number of validators is necessary, particularly to capture dynamic rewards during market fluctuations.

Automated Interest Rate Customization​

The Oracle tracks the Staking Yield of the Ethereum validator population and publishes this value onchain. This mechanism enables DeFi platforms to:

  • access staking yield data
  • automatically adjust interest rates for Liquid Staking Tokens (LSTs)
  • customize lending product parameters without manual intervention

By leveraging this onchain data, DeFi protocols can implement dynamic, market-responsive interest rates for LST-based lending products, enhancing both efficiency and user experience.