This repository hosts a CLI utitlity for mocking Chainlink Oracle prices in a local hardhat mainnet fork testing environment. Navigate to our Quickstart section to get the repo up and running.
For a full deep dive to the project architecture please visit the Chaos Labs blog.
Oracle values trigger internal state changes in web3 applications. Currently, when forking mainnent, oracle returns values are constant. This is because the Chainlink protocol only writes updated values to mainnet or public testnets. We want the ability to mock return values easily, so we can test how our contracts / applications react to different types of external data, hence this tool. Below, we provide some specific use cases for mocking oracle return values.
DeFi protocols and applications are at high risk due to volatile market conditions and a myriad of security vectors. Mocking Chainlink Oracle return values in a controlled, siloed testing environment allows us to address 2 common vectors.
Volatile Market Conditions
Volatility is a DeFi constant and is something that all protocols and applications should test for thoroughly. Internal application and protocol state is often a direct result of Oracle returns values. To further illustrate this let's use an example.
Imagine a lending protocol (Maker, AAVE, Benqi, Spectral.finance, etc..) that accepts Ethereum as collateral against stablecoin loans. What happens on a day like Black Thursday, when Ethereum prices cascade negatively to the tune of ~70% in a 48 hour time frame? Well, a lot of things happen 🤦.
One critical aspect of responding to market volatiltiy is protocol keepers triggering liquidations and thus ensuring protocol solvency.
With the ability to control Oracle return values, simulating such scenarios in your local development environment is possible.
Oracle Manipulation
Oracle manipulation is an additional attack vector. With this method, malicious actors research data sources that various oracle consume as sources of truth. When actors possess the ability to manipulate the underlying data source they trigger downstream effects, manifesting in altered Oracle return values. As a result of manipulated data, actors and contracts can trigger various unwanted behaviours such as modified permissions, transaction execution, emergency pausing / shutdown and more.
With the ability to manipulate Chainlink Oracle return values, simulating such scenarios in your local development environment is possible.
Our command-line tool is written in Typescript. Typescript introduces type safety for Javascript. Let's install this with the following command.
npm i -g ts-node- Confirm
ts-nodeinstalled correctly by runningts-nodeto run typescript (``) in a terminal window.
Next, we'll want to run a mainnet fork. We need the fork so we can have a snapshot of all deployed Oracles and their respective AggregatorProxies. AggregatorProxies are a common design pattern when using Chainlink Oracles. You can read more about them in the official Chainlink docs. We take care of managing these proxies behind the scenes, so no need to deep dive on that for now. Hardhat has an Alchemy integration. In order to fork mainnet you need an API key, so navigate to the alchemy site and sign up for one.
- Alchemy API key for mainnet fork access: Get one here.
git clone https://github.com/ChaosLabsInc/chaos-labs-chainlink.gitcd chaos-labs-chainlinknpm i- Installing project libs.npx hardhat compile- Compiling solidity contracts- In a separate terminal window (spawn a new window in iTerm with cmd+D) run:
npx hardhat node --fork https://eth-mainnet.alchemyapi.io/v2/<YOUR_ALCHEMY_KEY>- Spinning a mainnet fork locally. npm run start
After running the quickstart you should have the following: 2 terminals, 1 running an alchemy mainnet fork, another running the cli-tool and it should look like this:
This repo is meant to serve as an implementation spec for mocking oracle return values. This is a resource and reference for smart contract developers to implement such strategies and practices as part of their development lifecycle.
-
Select a price feed to configure / mock (ETH/USD, SNX/DAI etc...)
-
Select a mock function which will determine the Chainlink Aggregator Proxy return values
-
Set Initial value of Chainlink Oracle in the context of the simulation
-
Select the price delta in each tick and tick size (how often (in blocks) should the price update):
-
Deploy 🤝 💥
Before submitting a PR please run the test suite with npm run test.
- Ganache support
- CLI improvements. Have an idea to make this repo more user friendly? Let us know, or better yet, make a pull request :)