Fundamental Oracles

What are fundamental oracles (used in money market DeFi platforms)?

A fundamental oracle prices an asset based on its intrinsic value (its NAV redemption value, what it can actually be redeemed for) rather than its market price on a DEX. For example, syrupUSDT can always be redeemed for USDT at NAV, even if a thin DEX shows it temporarily trading at $0.98.

Why this matters

Most DeFi liquidations are triggered by short-term market price moves on lending platforms. Fundamental oracles eliminate that risk because the oracle reports the asset's redemption value, not the volatile market quote. A leveraged position priced with a fundamental oracle can only be liquidated if the underlying yield economics genuinely break down — not because of a brief market dislocation.

Yuzu uses fundamental oracles wherever possible for leveraged positions, removing market-driven liquidation risk from the strategy.