Price Indices

Bullet utilizes two key price indices: the Oracle Price and the Mark Price, allowing for fair and accurate references and exchange calculations.

Oracle Price

The Oracle Price provides a reliable reference to the spot market value of an asset.

Key Functions:

• Funding Rate Calculation: Used to calculate funding rates for perpetual swaps, aligning them with spot market conditions.

• Lending Position Liquidations: Serves as the reference price for determining liquidation thresholds in our lending markets.

Implementation:

Sourced from reputable external providers. For details, refer to Oracle.

Mark Price

The Mark Price represents the fair value of a perpetual contract, crucial for risk management and preventing unnecessary liquidations.

Key Functions:

• Margin Calculations: Used to evaluate account margin and collateral, providing a stable assessment of position value.

• Futures Liquidation Price Determination: The primary trigger for liquidations on perpetual contracts, mitigating liquidations due to short-term volatility.

• Unrealized PNL Marking: Calculates unrealized profits and losses on open perpetual positions for a consistent view.

• Trigger Order Execution: Activation price for trigger orders on perpetual contracts is compared against the Mark Price.

Implementation:

The Mark Price is the median of the following, updated every few seconds:

1. Oracle Price + 150-second EMA of (Order Book Mid-Price - Oracle Price)

2. Median of Best Bid, Best Ask, Last Trade

3. Median of Binance, OKX, Bybit, and Hyperliquid perpetual mid-prices