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Observation

Definition

Section titled “Definition”

An observation is the act of reading the official closing price of the underlying at one timestamp in observations[] and applying the series rules to it. Observations are the only moments at which anything happens to a live series. Between observations, prices are irrelevant to the protocol.

Schedule

Section titled “Schedule”
  • observations[] is an array of uint40 UNIX timestamps, strictly ascending, fixed at creation and validated by MarketCalendar.isOfficialClose (each must be an official US equity close).
  • observations[0] is the strike observation. It fixes s0 and is the moment matching is finalised (finalizeStrike).
  • observations[1..last-1] are intermediate observations: coupon and autocall.
  • observations[last] is maturity: coupon and knock-in decision.

A “26 fortnightly observations” series therefore has 27 timestamps: one strike plus 26 coupon dates, of which the 26th is maturity.

Timing rule

Section titled “Timing rule”

fact Official close is 20:00 UTC while US daylight saving time is in force and 21:00 UTC otherwise, Monday to Friday, excluding registered holidays, with registered early closes at 17:00 or 18:00 UTC. DST boundaries are computed on-chain (second Sunday in March, first Sunday in November). See Oracle and MarketCalendar.

YearDST begins (US)DST ends (US)Regular close before / after
20268 Mar1 Nov21:00 UTC → 20:00 UTC → 21:00 UTC
202714 Mar7 Novsame pattern
202812 Mar5 Novsame pattern
202911 Mar4 Novsame pattern
203010 Mar3 Novsame pattern

How the price is read

Section titled “How the price is read”

NoteCore.observe(seriesId) is permissionless. It calls OracleAdapter.observe(feed, closeTs), which is accepted only once closeTs + closeGrace (default 5 min) has passed and walks Chainlink rounds backwards from latestRoundData to the last round with updatedAt ≤ closeTs + closeGrace — the closing print; that round must be no older than closeTs − maxPreCloseLag (default 30 min), positive and answeredInRound >= roundId. Rounds published after the grace never qualify, so the observed round does not depend on when the keeper calls. If a backup feed is configured and the primary fails, the backup is used; if the two deviate by more than maxDeviationBps (default 300) or both fail, the observation is Deferred.

Outcomes

Section titled “Outcomes”
observe(seriesId)price P at closeTs P < barrier barrier ≤ P < autocall P ≥ autocall intermediate maturity no couponseries continues no couponphysical settlement coupon paidseries continues coupon paidcash settlement coupon + autocallprincipal returned coupon paidcash settlement
The same price produces different outcomes at an intermediate observation and at maturity. At maturity the autocall level is irrelevant: any price at or above the barrier settles in cash.

Ordering and liveness

Section titled “Ordering and liveness”
  • Observation i cannot be processed before observation i−1 is finalised, and not before its own closeTs.
  • A Deferred observation may be retried by anyone within deferralWindow (72 h). After that, governance may forceObserve with an explicit price after a mandatory 24 h delay (event emitted), or cancel the observation, in which case no coupon is paid and no autocall occurs for that date and the series continues.
  • The first successful observe after closeTs earns keeperRewardQuote (default 2 USDG) from accrued fees. See Automation and cranks.

What is not an observation

Section titled “What is not an observation”
  • The provisional reference price used during Subscription to value SHIELD deposits pro rata. It is the latest feed answer at deposit time and has no effect on settlement; final matching uses s0.
  • Any price read outside observations[], including weekend prints, intraday moves and the 24/7 on-chain AMM price.