# How Can a DeFi Protocol Be Secured against Both Oracle and Governance Risks Simultaneously? ⎊ Path

**Published:** 2025-12-05
**Author:** Greeks.live
**Categories:** Path

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## How Can a DeFi Protocol Be Secured against Both Oracle and Governance Risks Simultaneously?

Security requires a multi-layered approach. Oracle security is achieved through DONs, TWAPs, and deviation checks.

Governance security involves time-locks on critical changes, a high voting threshold, and a diverse distribution of governance tokens. Furthermore, using a small, independent security council for emergency actions, while still governed by the DAO, provides a quick defense against both types of exploits.

- [What Is a Volume-Weighted Average Price (VWAP) and How Does It Differ from TWAP?](https://learn.greeks.live/path/what-is-a-volume-weighted-average-price-vwap-and-how-does-it-differ-from-twap/)

- [What Is the Main Defense Mechanism against a 51% Attack in Proof-of-Work Systems?](https://learn.greeks.live/path/what-is-the-main-defense-mechanism-against-a-51-attack-in-proof-of-work-systems/)

- [How Effective Is Changing the PoW Algorithm as a Long-Term Defense Strategy?](https://learn.greeks.live/path/how-effective-is-changing-the-pow-algorithm-as-a-long-term-defense-strategy/)

- [What Is the Primary Defense Mechanism against a 51% Attack on a PoW Network?](https://learn.greeks.live/path/what-is-the-primary-defense-mechanism-against-a-51-attack-on-a-pow-network/)

- [How Does a DEX Determine the Optimal Price Deviation Threshold for a “Push” Update?](https://learn.greeks.live/path/how-does-a-dex-determine-the-optimal-price-deviation-threshold-for-a-push-update/)

- [What Is a Decentralized Oracle Network (DON)?](https://learn.greeks.live/path/what-is-a-decentralized-oracle-network-don/)

- [How Does the Nonreentrant Modifier Implement the CEI Principle?](https://learn.greeks.live/path/how-does-the-nonreentrant-modifier-implement-the-cei-principle/)

- [How Is a ‘Settlement Price’ Determined by a DON for a Futures Contract?](https://learn.greeks.live/path/how-is-a-settlement-price-determined-by-a-don-for-a-futures-contract/)

## Glossar

### [Governance Risks](https://learn.greeks.live/area/governance-risks/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Framework ⎊ Governance Risks, within cryptocurrency, options trading, and financial derivatives, represent a multifaceted challenge stemming from the decentralized and often novel structures governing these assets and markets.

## Discover More

### [Can a Token Have Both Consumptive Use and Still Be Deemed a Security?](https://learn.greeks.live/path/can-a-token-have-both-consumptive-use-and-still-be-deemed-a-security/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Can a Token Have Both Consumptive Use and Still Be Deemed a Security?](https://learn.greeks.live/wp-content/uploads/2025/10/Bespoke-Material-Finishes-Interfacing-Layered-Asset-Allocation-Structures-Under-Extreme-Volatility-Profiling.webp)

Yes, if the primary motivation for purchase is the expectation of profit derived from the efforts of the promoter, despite having utility.

### [How Is Liquidation Handled in a DeFi Derivatives Protocol?](https://learn.greeks.live/path/how-is-liquidation-handled-in-a-defi-derivatives-protocol/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Is Liquidation Handled in a DeFi Derivatives Protocol?](https://learn.greeks.live/wp-content/uploads/2025/10/Precision-Engineering-Visualization-of-Decentralized-Finance-Automated-Market-Maker-Mechanism-Dynamics.webp)

Automated by a smart contract when collateral falls below maintenance margin, forcibly closing the position to cover debt.

### [Define a "Cash-Secured Put" and Its Risk Profile](https://learn.greeks.live/path/define-a-cash-secured-put-and-its-risk-profile/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Define a "Cash-Secured Put" and Its Risk Profile](https://learn.greeks.live/wp-content/uploads/2025/10/Crystalline-Bifurcation-of-Digital-Asset-Futures-Utilizing-Volatility-Surface-Skew-Projections.webp)

A cash-secured put is selling a put with cash collateral; max loss is limited to the strike price, max profit is the premium.

### [What Is the Term for an Options Strategy That Involves Simultaneously Buying and Selling Different Options Contracts?](https://learn.greeks.live/path/what-is-the-term-for-an-options-strategy-that-involves-simultaneously-buying-and-selling-different-options-contracts/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Term for an Options Strategy That Involves Simultaneously Buying and Selling Different Options Contracts?](https://learn.greeks.live/wp-content/uploads/2025/10/Decentralized-Autonomous-Organization-Governance-Mechanism-Token-Allocation-Structure-Abstract-Visualization.webp)

An "options spread" or "combination," used to profit from specific market views while managing and limiting risk.

### [How Is the Governance Token's Supply Controlled by the Protocol?](https://learn.greeks.live/path/how-is-the-governance-tokens-supply-controlled-by-the-protocol/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Is the Governance Token's Supply Controlled by the Protocol?](https://learn.greeks.live/wp-content/uploads/2025/10/Aerodynamic-High-Frequency-Trading-Apparatus-Interface-Reflecting-Decentralized-Exchange-Protocol-Optimization.webp)

Supply is dynamically adjusted by the protocol's algorithm through minting and burning to maintain the stablecoin's peg.

### [How Is a "Cash-Secured Put" Different from a Naked Put?](https://learn.greeks.live/path/how-is-a-cash-secured-put-different-from-a-naked-put/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Is a "Cash-Secured Put" Different from a Naked Put?](https://learn.greeks.live/wp-content/uploads/2025/10/Quantum-Entanglement-Lens-Reflecting-Impermanent-Loss-Dynamics-in-Decentralized-Finance-Yield-Farming.webp)

Cash-secured put has dedicated cash collateral equal to the strike price; a naked put relies on margin, increasing leverage and risk.

### [How Does a DeFi Protocol's Reliance on Transaction Ordering Relate to Nonce Management?](https://learn.greeks.live/path/how-does-a-defi-protocols-reliance-on-transaction-ordering-relate-to-nonce-management/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does a DeFi Protocol's Reliance on Transaction Ordering Relate to Nonce Management?](https://learn.greeks.live/wp-content/uploads/2025/10/Minimalist-Depiction-of-Decentralized-Finance-Protocol-Interface-Interacting-with-Volatility-Surface-Approximation.webp)

Correct nonce management is crucial to ensure sequential transaction processing, which is vital for time-sensitive DeFi operations.

### [What Defense Mechanisms Can Be Deployed against a Sybil Attack on an Oracle Network?](https://learn.greeks.live/path/what-defense-mechanisms-can-be-deployed-against-a-sybil-attack-on-an-oracle-network/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Defense Mechanisms Can Be Deployed against a Sybil Attack on an Oracle Network?](https://learn.greeks.live/wp-content/uploads/2025/10/Precision-Machined-Asset-Disc-Assembly-Modeling-Volatility-Surface-Structure-in-Digital-Asset-Hedging.webp)

High staking requirements, reputation systems, and proof-of-identity mechanisms to make acquiring and coordinating many nodes expensive.

### [Can a Trader Use Both Isolated and Cross Margin Simultaneously?](https://learn.greeks.live/path/can-a-trader-use-both-isolated-and-cross-margin-simultaneously/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Can a Trader Use Both Isolated and Cross Margin Simultaneously?](https://learn.greeks.live/wp-content/uploads/2025/10/Crystallized-Geometric-Structures-Illustrating-Complex-Financial-Derivative-Payoff-Profiles-on-Blockchain-Ledgers.webp)

Yes, traders can use both modes in the same account, allowing for flexible management of different positions' risk profiles.

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