papers/zoo-dex/sections/04-model-pricing-oracle.tex

\section{Model Pricing Oracle}

\label{sec:oracle}

\subsection{Demand-Driven Pricing}

AI model NFTs do not have a fixed price; their value depends on inference demand, model accuracy, and market competition. Zoo DEX introduces a model pricing oracle that computes a fair value:

\begin{equation}
P_{\text{model}} = \alpha \cdot \text{InferenceDemand} + \beta \cdot \text{Accuracy} + \gamma \cdot \frac{1}{\text{CompetitorCount}}
\end{equation}

where:
\begin{itemize}
    \item \textbf{InferenceDemand}: Rolling 7-day inference call count (from PoAI attestations)
    \item \textbf{Accuracy}: Model's benchmark accuracy on standard test sets
    \item \textbf{CompetitorCount}: Number of models serving the same task category
\end{itemize}

\subsection{Oracle Implementation}

The oracle is implemented as a hook on the PoolManager (LP-9013 HooksRegistry):

\begin{lstlisting}[basicstyle=\ttfamily\small,caption=Model Pricing Oracle Hook]
contract ModelPricingHook {
    function beforeSwap(
        PoolKey calldata key,
        SwapParams calldata params
    ) external returns (bytes4) {
        if (isModelNFTPair(key)) {
            uint256 fairPrice = computeFairPrice(
                key.currency1  // model NFT
            );
            require(
                priceWithinBounds(params, fairPrice, 5),
                "Price deviation > 5%"
            );
        }
        return this.beforeSwap.selector;
    }
}
\end{lstlisting}

The hook prevents model NFTs from being traded at prices deviating more than 5\% from the oracle's fair value, protecting against manipulation of illiquid model markets.

\subsection{Oracle Data Sources}

\begin{table}[t]
\centering
\begin{tabular}{lcc}
\toprule
\textbf{Data Source} & \textbf{Update Frequency} & \textbf{Weight} \\
\midrule
PoAI inference attestations & Per block & 0.50 \\
On-chain benchmark results & Daily & 0.30 \\
CLOB order book depth & Real-time & 0.15 \\
Cross-chain price feeds & Per block & 0.05 \\
\bottomrule
\end{tabular}
\caption{Model pricing oracle data sources and weights.}
\label{tab:oracle}
\end{table}