Palomino Finance utilizes external oracles like [Tellor.io](http://Tellor.iohttps://tellor.io/) to value collateral deposits and manage liquidations. More oracles will be incorporated in the future to enhance the reliability of price feeds.

To protect against de-pegging events caused by temporary market liquidity issues, oracle price feeds for LSTs and yieldcoins are based on the unit NAV of their underlying holdings rather than market-traded prices. For example, Tellor provides a feed for sfrxUSD/frxUSD (how much frxUSD is staked per sfrxUSD) and frxUSD/USD (how much frxUSD is trading for). The final price of sfrxUSD is then determined by multiplying sfrxUSD/frxUSD with frxUSD/USD.

Additionally, the price of dSTABLE assets are hardcoded on dLEND as follows:

Saga Dollar (D) = 1 USD

Since dSTABLE assets are disabled as borrowing collateral, hardcoding their prices has no impact on liquidations. Hardcoding also prevents borrowing capacity manipulation on dLEND when a dSTABLE asset trades above par. At the same time, borrowers can repay their loans at face value on dLEND—especially when dSTABLE assets trade below par—thereby incentivizing natural arbitrage from borrowers to deleverage and restore price stability.