Documentation Index
Fetch the complete documentation index at: https://docs.ratiofx.com/llms.txt
Use this file to discover all available pages before exploring further.
Oracle Pricing
Ratio prices every FX swap using real-time data from institutional oracle feeds — not an AMM bonding curve. This means the rate you receive is anchored to the live market, your execution quality does not degrade with transaction size, and there is no arbitrage dependency baked into your pricing.How it works
Every quote begins with a real-time mid-market rate from professional-grade oracle feeds. The FX Engine then constructs a bid/ask spread around that rate based on current market conditions. The result closely tracks the real-world FX market rather than a synthetically derived curve.
Oracle aggregation
Ratio fetches and validates real-time FX rates from multiple independent price sources. Every incoming price is checked for freshness and cross-source consistency before being used.
Mid-rate adjustment
The mid-rate is adjusted based on current pool inventory. Flows that reduce a pool imbalance are made cheaper; flows that worsen it are made more expensive. This incentivises natural rebalancing without manual intervention.
Spread construction
A bid/ask spread is built dynamically from four independent risk components — base, volatility, liquidity, and inventory. The spread reflects actual market conditions at the moment of quoting.
Oracle sources
Ratio uses Pyth Network as its primary oracle source. Pyth provides institutional-grade FX price data updated approximately every 400 milliseconds, sourced from professional market makers and trading firms. For redundancy, Ratio also integrates Web2 FX API sources as fallback feeds. If the primary on-chain oracle becomes stale or unavailable, the system falls back to off-chain FX data to maintain continuity. If no reliable source is available, trading halts automatically rather than executing at an unreliable price.Every oracle price is validated for freshness and cross-source consistency before being used in a quote. Stale data or significant divergence between sources triggers protective measures automatically — see Risk Management for details.
Why not an AMM?
AMM-based DEXs (like Uniswap or Curve) derive price from a mathematical bonding curve based on pool ratios. This creates three problems that make AMMs unsuitable for institutional FX:| Problem | AMM behaviour | Ratio behaviour |
|---|---|---|
| Slippage on size | Larger trades move the price against the user. A $100K swap gets a materially worse rate than a $1K swap on the same pair. | Every quote is anchored to the oracle mid-rate. Execution quality does not degrade with size. |
| No market anchor | AMM prices can drift significantly from real-world FX rates, especially in thin markets. | Every quote is derived from live institutional FX data. |
| Arbitrage dependency | AMMs rely on arbitrageurs to correct mispricing. LPs bear the cost of continuous rebalancing (impermanent loss). | Spread components reflect actual risks. No arbitrage dependency. |
Spread construction
Ratio’s spread is not a single fixed number. It is constructed from four independent components that each address a distinct real-world risk:| Component | What it reflects | When it changes |
|---|---|---|
| Base spread | A minimum floor covering operating costs | Varies by corridor and transaction size tier — larger trades get a tighter base |
| Volatility component | The risk of price moving between quote issuance and execution | Widens during periods of elevated short-term price movement |
| Liquidity component | The cost of sourcing or replacing currency externally | Higher for thinner emerging-market currencies |
| Inventory component | Current pool balance versus target | Tightens for flows that reduce imbalance; widens for flows that worsen it |
Key advantages
- No slippage — Your execution quality is the same at $1K and $1M. Oracle-based pricing means size does not move the market against you.
- Real market rates — Every quote is anchored to live institutional FX data, not a synthetic curve that can drift from the real world.
- Transparent pricing — All spread components are visible in every quote response. You always know exactly what you are paying.
- Institutional quality — Spreads in the single-digit basis points range for major corridors in normal conditions.