LP Linear Discount Oracle

Overview

Similar to Pendle Spark Linear Discount Oracle, the LPLinearDiscountOracle provides a deterministic discount factor for Pendle Liquidity Provider (LP) tokens. This oracle is designed to help money markets and lending platforms value LP tokens that represent a share in a liquidity pool containing Pendle's LP Tokens.

The only difference between this oracle and the standard Linear Discount Oracle is that the LP version allows setting the lpMaturedPrice - the price of the LP token at maturity, while the convergence price of PT is always 1.0.

The contract exposes familiar read functions (latestRoundData, decimals) so money markets can plug it in like a Chainlink-compatible feed. The returned value is a multiplier in 18 decimals, not a USD price.

Please see the Choosing Linear Discount Parameters documentation for guidance on selecting appropriate linear discount parameters.

Use cases

For money markets listing LPs as collateral or borrowable assets, the oracle provides a stable, predictable valuation path. Integrators read the factor, multiply it by their LP redemption preview (and then by the underlying'S USD price feed if needed). Because the factor converges linearly to lpMaturedPrice at expiry, LTVs and liquidation thresholds behave smoothly instead of whipsawing with AMM volatility.

Usage

Deployment

The oracle can be deployed using the lpLinearDiscountOracleFactory. The address of the factory can be found in the Deployments sections, under the "lpLinearDiscountOracleFactory" field. The factory has a method to help with oracle deployment:

function create(address market, uint256 basePtDiscountPerYear, uint256 lpMaturedPrice) external returns (address res);

Feed retrieval

function latestRoundData()
    external
    view
    returns (uint80 roundId, int256 answer, uint256 startedAt, uint256 updatedAt, uint80 answeredInRound)

Since the oracle is deterministic, except for answer, every other fields returned are 0.

Feed properties

• Decimals: The oracle returns values in 18 decimals, so integrators should multiply the factor by their LP redemption preview (also in 18 decimals) to get the value.
• Deterministic: The oracle is deterministic, meaning the same inputs will always yield the same output. This allows for predictable valuation paths.
• Linear Discount: The discount factor increases linearly over time, converging to lpMaturedPrice at maturity.
• No External Calls: The oracle does not make any external calls during reads, ensuring minimal liveness or manipulation surface. It relies solely on block.timestamp for time calculations.

How answer is deterministically calculated

The answer relies on two parameters:

• baseDiscountPerYear - the annual discount slope, expressed in wad (1e18 = 100%/year).
• maturity - the LP maturity timestamp in seconds (LP.expiry()).
• lpMaturedPrice - the price of the LP token at maturity, expressed in wad (1e18 = 100%).

The answer at a given time t (in seconds) is calculated as follows:

$$\text{answer} = \text{lpMaturedPrice} \cdot \min\left( 10^{18}, 10^{18} - \frac{(\text{maturity} - t) \cdot \text{baseDiscountPerYear}}{365 \cdot 24 \cdot 60 \cdot 60} \right)$$