Earlier, we announced that Equilibrium has received a grant from Web3 Foundation. The grant program is part of the Foundation’s efforts to support open-source technologies that advance Web 3.0, particularly in relation to the Polkadot ecosystem, promoting the community’s advancement as a whole. In support of this goal, one of our main objectives is to pioneer services that facilitate other projects’ migration to Polkadot, specifically, a financial pallet.
The financial pallet is an open-source Substrate module that subscribes to external price feeds/oracles, gathers asset prices and calculates financial metrics based on the collected information. The financial module will be a beneficial pallet for anyone building complex DeFi and Fintech solutions using Substrate technology because it offers a lot of functionality out of the box to reduce development efforts.
In line with our development roadmap, we have reached the end of the first stage “Initial implementation, subscription to oracle” (Sep 21 — Oct 4). At this stage we have established a reliable foundation for the further development of our DeFi module and its practical functionality.
✅ Used the Substrate-fixed library for fixed point math implementation. This is done to ensure precision and accurate accounting when dealing with formulas and various calculations.
✅ Implemented a subscription to oracle price changes and stored prices in price arrays with the default time intervals: 1 minute, 10 minutes, 1 hour, 4 hours, 1 day.
Price feeds are key for all of our main products: Pegging our stablecoin to USD, managing the exchange pairs on our DEX, and maintaining liquidity on both the aggregated and the individual user-levels in terms of cross-chain asset values. While the oracle for the financial-pallet grant is just a simple mock, we’re working on a more generic oracle module which allows validators to feed prices from multiple sources (both subscription-based and free of charge) and calculates a final median price based on the number of last data points for each asset.
✅ Implemented functions which perform returns and logged returns calculations for a given frequency.
Returns will further allow us to calculate volatility, portfolio weights and perform portfolio optimisation where needed.
✅ Created a pallet interface with a complete set of functions (calc. returns, calc. volatility, calc. correlations, calc. portfolio vol, calc. Value at Risk).
Here we’ve basically outlined a frame of the entire financial pallet.
✅ Published the code in Equilibrium’s public GitHub repository.
During the next period (Oct 5 — Oct 18) we are planning to implement the functionality for returns, volatilities, and correlations calculations.