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Can a Malicious Oracle Manipulate the Price of a Crypto Derivative?

Yes, a compromised oracle can feed a false price to a derivative contract, causing incorrect liquidation or settlement, highlighting the need for decentralized data sources.
Greeks.Live09.11.25

Can a Malicious Oracle Manipulate the Price of a Crypto Derivative?

Yes, a malicious or compromised oracle is a significant vulnerability for decentralized crypto derivatives. If the oracle feeds a false price to the smart contract, the contract will execute based on the manipulated price, potentially leading to improper liquidation or settlement.

This is why decentralized oracle networks (DONs) are crucial, as they distribute the data source risk and require consensus on the price feed to prevent single-point failure.

Why Is a Single, Centralized Oracle Considered a Point of Failure for a DeFi Smart Contract?
Why Is Data Security Crucial for Oracles?
What Is the Risk of an ‘Oracle’ Attack on a Decentralized Futures Platform?
How Can a Malicious Oracle Attack a Derivatives Platform?

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