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Price Cap Adapters

This folder contains the core price cap adapter contracts. For usage instructions, see how-to.md.

PriceCapAdapterBase (LSTs)

Abstract base contract for Liquid Staking Tokens (wstETH, rETH, weETH, etc.) that grow in value over time.

How It Works

The adapter caps prices based on a maximum allowed growth rate:

  1. Stores a snapshot ratio and timestamp of the LST/underlying exchange rate
  2. Calculates a maximum allowed ratio based on configured yearly growth percentage
  3. If current ratio exceeds the cap, returns the capped value
maxRatio = snapshotRatio + (maxGrowthPerSecond × timeSinceSnapshot)

if (currentRatio > maxRatio) return maxRatio
else return currentRatio

Parameters

Parameter Description
snapshotRatio Exchange ratio at snapshot time
snapshotTimestamp When the snapshot was taken
maxYearlyRatioGrowthPercent Maximum allowed growth in bps (e.g., 500 = 5%)
minimumSnapshotDelay Minimum age of snapshot (typically 7-14 days)

Design Considerations

  • Precision: Maximum precision is not the objective. The cap has sufficient margin, and Aave's risk parameters provide additional protection.

  • Safety checks: Basic validation is applied, but since access is controlled by trusted entities (Aave governance), checks are not exhaustive. Additional layers (e.g., Risk Stewards) provide extra limitations.

  • Snapshot timing: Timestamps should not decrease between updates. The MINIMUM_SNAPSHOT_DELAY prevents issues from discrete ratio updates in LSTs—if a snapshot is taken just before a ratio update, the calculated growth rate would be artificially high.

  • MAXIMUM_SNAPSHOT_TERM: Snapshots cannot be older than 180 days to ensure parameters stay current.

  • Internal conversion: Yearly bps are converted to per-second growth rate internally for gas efficiency. Yearly bps format is exposed externally for consistency with other Aave systems.

Extending

Each LST has unique characteristics. Inherit from PriceCapAdapterBase and implement getRatio() to fetch the current exchange rate. See lst-adapters/ for examples.

PriceCapAdapterStable (Stablecoins)

Simplified adapter for USD-pegged stablecoins without growth component.

How It Works

if (oraclePrice > priceCap) return priceCap
else return oraclePrice

Parameters

Parameter Description
priceCap Maximum allowed price (e.g., 1.04e8 for 4% cap)
MAX_STABLE_CAP_VALUE Hard limit of 2e8 (200%)

PendlePriceCapAdapter (PT Tokens)

Adapter for Pendle Principal Tokens using linear discount decay model.

How It Works

PT tokens trade at a discount that decreases linearly to zero at maturity:

currentDiscount = (maturity - now) × discountRatePerYear / SECONDS_PER_YEAR
PT_price = assetPrice × (1 - currentDiscount)

Parameters

Parameter Description
discountRatePerYear Current discount rate (e.g., 0.05e18 = 5%)
maxDiscountRatePerYear Maximum allowed discount rate
maturity Read from PT token contract

Synchronicity Adapters

Combine two Chainlink feeds to derive a third price pair.

Adapter Formula Use Case
CLSynchronicityPriceAdapterBaseToPeg (Asset/USD) / (ETH/USD) = Asset/ETH Get ETH-denominated price
CLSynchronicityPriceAdapterPegToBase (Asset/ETH) × (ETH/USD) = Asset/USD Get USD price from ETH pair
FixedRatioSynchronicityPriceAdapterBaseToPeg Fixed ratio × (Base/Peg) Discounted price pairs

Requirements

  • For BaseToPeg: both input feeds must have equal decimals
  • Output price is calculated with up to 18 decimals