Update on 15/6/22 scnSOL mispricing


We are very sorry that this has happened and have done several things to make sure this doesn’t happen again.

What happened?

Solana transaction details | Solscan

~8 seconds later, an arbitrage bot takes advantage of this mispricing and does the following sequence of swaps:

  1. Orca: SOL -> USDC
  2. Orca: USDC-> scnSOL
  3. Saber: scnSOL-> SOL

Solana transaction details | Solscan

This greatly decreased the SOL amount in the Saber scnSOL/SOL pool. scnSOL’s Switchboard oracle, which pulls from the Saber scnSOL/SOL pool as its source, reads this as a drop in price.

Over the next four minutes, arbitrage bots do their work and rebalance the scnSOL/SOL pool, causing the price of scnSOL to return back to a fair market value.

The vast majority of scnSOL stakers were unaffected by the momentary price drop, but some users who had used scnSOL as collateral on borrow-lend platforms like Solend or Apricot were liquidated.

What caused this? How are we fixing it?

Improve Socean’s instant unstake

We suspect that the user did not notice that they were getting a very bad deal. While we do display the amount of SOL that will be received in our UI very clearly, users who are not looking closely at the amount may miss this information. And our UI could definitely be improved to make it more obvious.

We were aware of this issue, but triaged it as low priority as i) we believed that most people would price-shop or use an aggregator to find the best price, especially in the face of a 98% slippage; and ii) our new website design would resolve this issue. The timing was especially unfortunate as our new website would have rolled out at the start of this week.

To make sure this doesn’t happen again, we are rolling out a new website design this week that uses Jupiter to get the guaranteed best price of scnSOL over all LMs. Our updated design will also make it clearer how much SOL you will get compared to delayed unstake.

Consolidate and increase scnSOL/SOL liquidity

To make sure this doesn’t happen again, we are in the process of consolidating scnSOL/SOL liquidity into a single AMM, and procuring more liquidity for scnSOL/SOL. We are also intensely exploring the design of a new, more capital-efficient AMM that will allow scnSOL holders to instantly unstake large amounts with much smaller slippage.

Improve Switchboard oracle robustness




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