Update on XAG pricing incident
An update on yesterday's XAG pricing incident
Yesterday Chainlink experienced a pricing anomaly on their XAG/USD (Silver Ounce) price feeds, you can find their post here. Synthetix consumes the XAG price feed in addition to a number of other feeds Chainlink publishes on Ethereum mainnet. The anomaly was one of human error and not data integrity or an exploit.
Irrespective of the root cause of the anomaly an incorrect price on any asset poses significant risk to the Synthetix platform and SNX stakers. We will be reviewing this incident and implementing measures to ensure any future pricing anomalies are handled at the protocol level. We will be documenting several SIPs (Synthetix Improvement Proposals) over the new few weeks to address this issue and improve the redundancy of the protocol to pricing anomalies.
During this incident there were several traders that exploited the mispricing to generate ~$36,000 USD of profit. These trades were at the expense of SNX stakers and Chainlink has offered to cover these losses. This process will be coordinated with Synthetix over the next few days.
We are committed to migrating the Synthetix price feeds from our proprietary oracle to the Chainlink network, so will continue to work with the Chainlink team to identify areas of risk and ensure we have systems in place to prevent an incident like this from occurring in the future.