We've explained how positions works, and that swaps are executed by external market makers. Now, at the moment of the swap, the tokens' prices is determined by an oracle.
Our oracle currently uses Uniswap's V3 pool oracles to determine the correct price. These pool oracles return a time-weighted average price (or TWAP). Our oracle uses a time period that can be between 1 and 20 min.
As a consequence of this approach, only token pairs that have a pool (with at least some liquidity) in Uniswap V3 can be created on Mean Finance.
It is important to mention that this approach works as long as the price in Uniswap V3 pools is reliable.
We recommend that users create positions in token pairs that have a decent amount of liquidity on a Uniswap V3 pool.