Plutus: Oracles + PAB + Swap dApp

Topic: Oracle-based smart contract with update & usage logic Includes: On-chain logic, off-chain contract, EmulatorTrace, and PAB integration Tools: Plutus, Haskell, Template Haskell, PAB

🔢 Table of Contents

1. 🔍 What Are Oracles?

2. ⚙️ Oracle Implementation Overview

3. 🧹 Oracle Types and Core Logic

4. ⚖️ Swap Contract (Using the Oracle)

5. 📊 Oracle Lifecycle

6. 📚 Off-Chain Contracts

7. 🔢 Test with EmulatorTrace

8. ✨ PAB Integration

9. 💡 Glossary of Key Terms

10. 📄 Next Steps

---

1️⃣ 🔍 What Are Oracles?

An oracle bridges off-chain data to the blockchain. Smart contracts on Cardano can't directly access external data like exchange rates, weather, or random numbers. Oracles solve this by publishing such data on-chain in a secure and verifiable way.

Examples:

• ADA/USD exchange rates

• Weather data for insurance contracts

• Randomness for games

• Sports match results

---

2️⃣ ⚙️ Oracle Implementation Overview

We implement an oracle that provides an ADA/USD exchange rate using:

• ⚫ A UTxO carrying the exchange rate in its datum

• 🏷️ An NFT to uniquely identify the "true" oracle output

• ✍️ A validator supporting two actions:

  • Update (by the oracle operator)

  • Use (by contracts that read the value)

---

3️⃣ 🧹 Oracle Types and Core Logic

🔹 Oracle Record (Parameters)

data Oracle = Oracle
  { oSymbol   :: CurrencySymbol
  , oOperator :: PubKeyHash
  , oFee      :: Integer
  , oAsset    :: AssetClass
  }

🔹 Redeemer

data OracleRedeemer = Update | Use

🔹 Validator: mkOracleValidator

mkOracleValidator :: Oracle -> Integer -> OracleRedeemer -> ScriptContext -> Bool

Key checks:

• 🔒 NFT must be present in both input/output

• 🛎️ If Update: Signed by operator & datum is valid

• ✅ If Use: Oracle value unchanged & fee paid

---

4️⃣ ⚖️ Swap Contract (Using the Oracle)

Users deposit ADA at a swap script address. Another user can buy ADA by providing the required USDT (price calculated using the oracle).

👤 Datum: PubKeyHash (seller)

➞ Redeemer: () (unit)

🔹 Swap Validator: mkSwapValidator

mkSwapValidator :: Oracle -> Address -> PubKeyHash -> () -> ScriptContext -> Bool

Key logic:

• If signed by seller: refund allowed

• If used by buyer:

  • Requires oracle input

  • Enforces price based on oracle value

  • Checks correct amount of USDT paid to seller

---

5️⃣ 📊 Oracle Lifecycle

Step	Action	By	Redeemer	Result
1	Mint NFT	Oracle	—	Token identifies oracle
2	Start oracle	Oracle	Update	Initial value set
3	Update value	Oracle	Update	Datum updated
4	Use value	Any contract	Use	Oracle value consumed

---

6️⃣ 📚 Off-Chain Contracts

🔹 startOracle

• Mints NFT

• Constructs Oracle parameters

• Uses forgeContract

🔹 updateOracle

• Looks up UTxO with NFT

• Consumes it, creates a new one with updated datum

• Paid fees can be collected by oracle operator

🔹 runOracle

• Combines startOracle and loops updateOracle

🔹 offerSwap, useSwap, retrieveSwaps

• offerSwap: Locks ADA at swap address

• useSwap: Uses oracle to calculate USDT price and executes swap

• retrieveSwaps: Seller reclaims their ADA if not swapped

---

7️⃣ 🔢 Test with EmulatorTrace

🏋️ Actors:

• Wallet 1: Oracle operator

• Wallets 2–5: Swap participants

🔹 Test Flow:

1. Oracle is started, value initialized

2. Swaps are offered

3. Oracle is used to complete swaps

4. Oracle is updated, fees collected

---

8️⃣ ✨ PAB Integration

🔹 oracle-pab.hs

• Starts web server

• Initializes oracle, swaps, and distributes tokens

• Writes contract instance IDs to disk

🔹 oracle-client.hs

• Reads oracle instance ID

• Fetches live rate (e.g., from CoinMarketCap)

• Calls update endpoint every few seconds

🔹 swap-client.hs

• CLI tool for Wallets

• Endpoints:

  • Offer

  • Retrieve

  • Use

  • View funds

---

9️⃣ 💡 Glossary of Key Terms

Term	Meaning
Oracle	Bridge between off-chain data and smart contracts
NFT	Uniquely identifies a UTxO (oracle instance)
Datum	Stores data like price in UTxO
Redeemer	Input to a script that describes action taken
UTxO	Unspent Transaction Output
Validator	On-chain function that enforces logic
PAB	Plutus Application Backend for real-world deployment
AssetClass	Tuple of CurrencySymbol + TokenName

---

🔣 10. 📄 Next Steps

• 📚 Build a front-end UI for the swap dApp

• ✨ Extend oracle to support median-of-n feeds

• ⚖️ Add slashing for invalid data via staking

• 🎯 Deploy on Cardano testnet using real oracle feeds

---