How Can a DeFi Protocol Detect and Respond to a TWAP Oracle Manipulation Attack in Real-Time?

A DeFi protocol can detect a TWAP oracle manipulation attack in real-time by monitoring for unusual price movements and trading activity on the underlying DEX. For example, a sudden spike in trading volume or a significant deviation from the price on other exchanges could be indicators of an attack.

In response to a suspected attack, the protocol can trigger a circuit breaker to pause liquidations and other critical functions. It can also notify the community and developers to investigate the issue and take appropriate action.