How Can a Malicious Oracle Attack a Derivatives Platform?
A malicious oracle can feed false or manipulated price data to a derivatives smart contract. If the contract relies on this compromised data to calculate margin, liquidate positions, or settle trades, the attacker can profit by causing incorrect contract execution.
For instance, a manipulated price spike could trigger unfair liquidations, allowing the attacker to acquire collateral cheaply.
Glossar
Malicious Oracle Attack
Oracle ⎊ A malicious oracle attack, within cryptocurrency derivatives and options trading, represents a critical vulnerability where an external data feed ⎊ the oracle ⎊ providing price information or other essential inputs is compromised to manipulate market outcomes.
Malicious Oracle
Exploitation ⎊ A Malicious Oracle within cryptocurrency, options, and derivatives markets represents a compromised data source feeding inaccurate or deliberately false information into smart contracts or pricing models.