Clarification requested: How can liquidators and other traders access the off-chain oracle prices?

[CodeForcer]

Investigation of liquidation bots on DyDx reveals that basically 100% of these bots have access to the off-chain prices published via the ScuttleButt network.

An example of the traceback of such a bot is here:

Tx 0x37de0bbafb511180cf246cf5d7685bc174d493311036463eb670f846ba2cf119

You’ll notice the first thing each of these bots does is make a poke to the oracle with the new prices from ScuttleButt, to effect the liquidation. It’s basically impossible to profitably run a liquidations bot without being the poster of the prices.

After searching everywhere for how to get access to these prices I’m left feeling confused. Some of the discussion here seems to indicate that you need to be providing some kind of community service to get access.

However, it’s easily observable on the blockchain that hundreds of bot operators already have access to these price feeds off-chain, and are using them daily to trade liquidations on various markets. Therefore, it is clearly unfair not to allow the public to access these prices, as the effect is to permission only select people to make millions of dollars in profit in a super centralised and sandboxed environment where no-one else is allowed to compete.

If this is not the case, what is the process for getting access to these prices off-chain? There doesn’t appear to be any public information clarifying this.

Thanks!

[taylor814ce]

Bumping this question, I’d like to get a little clarity as well.

[g_dip]

I’m not an Oracle expert, but couldn’t dYdX simply add a few second delay to inputting the prices into the system and completely eliminate this issue?

[CodeForcer]

I’ve brought this suggestion up with them, their official response was:

I think from an entire protocol perspective the 20s delay is worse than the liquidator fairness problem it would solve. Adds a bit of risk to the whole protocol

It’s actually good for the protocol that now those submitting an oracle price have an incentive to do so earlier. Because they can immediately liquidate valuable accounts too

Which would incentivise them to submit the maker prices on chain quicker

I don’t follow that logic to be honest, but they seem highly resistant to dealing with the issue on their end. Which is extremely concerning as they themselves have access to the ScuttleButt network.

As a general principle it should probably be a rule that any liquidation protocols who themselves have access to ScuttleButt be required to institute a delay in their own protocols like MakerDAO has, because otherwise there is no transparency as to whether they are running insider trading bots and liquidating their own users.