How can this work if there is no Oracle? Think about it, the price of USD/ETH has to be retrieved from somewhere. It's not in the blockchain, so it must provided in an Oracle.
There is not one trusted oracle. The oracles are determined by the MKR holders, and MKR holders can easily replace oracles if they act badly. MKR ownership is decentralized, hence I don't think it's accurate to say there's one trusted oracle.
