Oracle

Navy does not outsource price data. L1 validators must agree on the asset price before a block is finalized. Three oracle systems run in parallel: Price, NAV, and Dividend.

Price Oracle

Validators run a sidecar process that connects to market data feeds. Every block, each validator submits a price attestation. The consensus price is the weighted median of all submissions.

Market Hours (9:30 AM to 4:00 PM ET). The canonical price is the NBBO (National Best Bid and Offer) midpoint. The midpoint is the average of the best bid and best ask across all US exchanges. Validators pull from high fidelity feeds (IEX, Nasdaq). A validator only earns block reward if its submission is within 0.5% of the median.

Dark Hours (Nights, Weekends, Holidays). The oracle holds the last closing price. Trading stays open with restrictions: maximum leverage drops by 50%, margin requirements increase. You cannot open a massive leveraged position on Saturday night when there is no real market to anchor the price.

Convergence Block. Monday morning at 9:30 AM ET, the first block after market open is the Convergence Block. The oracle updates from the stale weekend price to the live NBBO midpoint. If the gap exceeds 2%, a 5 minute trading pause kicks in. Margin calls are recalculated. Positions that are now underwater get flagged.

Confidence Intervals. Each price attestation includes a confidence score. When validators disagree by more than 0.3%, the protocol enters Protect Mode: no new positions, no leverage increases, liquidations use the most conservative price. This lasts until confidence recovers.

Outlier Detection. Validators beyond 0.5% deviation from the median are discarded and flagged. Three consecutive flags trigger a slash review. Staked Points are at risk.

NAV Oracle

When a company files a 10-Q (quarterly report) or 10-K (annual report) with the SEC, validators independently extract the NAV from SEC EDGAR.

Process. 10 validators pull Total Assets and Total Liabilities from the filing. If 8 of 10 agree on NAV per share within 1%, the on-chain value updates atomically. The NAV is used for discount/premium calculations and margin reference pricing.

Slashing. Validators who submit data that does not match consensus get their staked Points slashed. The penalty scales with the size of the error.

Dividend Oracle

Every dividend goes through validator consensus before it settles.

Step 1. A company files an 8-K with the SEC declaring a dividend. The filing hits EDGAR.

Step 2. Each of the 10 validators independently scrapes the filing and extracts three values: the ex date, the dollar amount per share, and the dividend type (ordinary income, capital gain, or return of capital).

Step 3. Validators submit their data to the chain. If 8 of 10 agree on all three values, the dividend event is confirmed and scheduled for the ex date block.

Step 4. On the ex date block, three things happen atomically: the oracle price drops by the dividend amount, long positions are credited, short positions are debited. Same block. Same transaction.

Oracle Lock. When validators detect an 8-K filing, the protocol enters Oracle Lock. For 5 minutes, no new positions can open and no leverage can increase. This lets the consensus form without front running.

Accrued Pricing

The Navy price includes dividends as they accrue.

Navy Price = Market Price + Accrued Dividend.

If ARCC is $20.00 on the NYSE and has accrued $0.45, the Navy price is $20.45. This is the same dirty price model bond markets use. You pay for the stock plus the cash already earned.

On ex date, the accrual resets. The Navy price snaps back down. Longs receive the dividend. The cycle starts again. This creates a sawtooth pattern: slow climb as dividends accrue, sharp drop on ex date.

Oracle Failsafe

If the price feed goes stale (no update for 60 seconds during market hours) or returns data outside expected bounds, new liquidations pause for that asset. Trading continues using the last known good price. The feed must recover and deliver two consecutive valid ticks before liquidations resume.

The Security Council (5/9 multisig) can manually intervene to freeze or unfreeze liquidations for a specific asset if the oracle is compromised.