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How Do Decentralized Exchanges (DEXs) Serve as On-Chain Price Oracles?

AMM-based DEX liquidity pool ratios provide on-chain price data, but are vulnerable to manipulation.
Greeks.Live21.11.25

How Do Decentralized Exchanges (DEXs) Serve as On-Chain Price Oracles?

Many DEXs, particularly those using Automated Market Makers (AMMs), inherently track the price of assets based on the ratio of tokens in their liquidity pools. Smart contracts can read this on-chain data directly, using the pool ratio as a real-time price feed.

While convenient, this method is vulnerable to manipulation if the pool has low liquidity or if the price is easily skewed by large trades or flash loans.

How Can Decentralized Exchanges (DEXs) Impact Altcoin Liquidity Compared to Centralized Exchanges (CEXs)?
What Is the Difference between an Order Book DEX and an AMM-based DEX?
Why Are Decentralized Exchanges (DEXs) Particularly Vulnerable to Price Manipulation?
How Do Decentralized Exchanges (DEXs) Differ from Centralized Exchanges in Their Vulnerability to State-Sponsored Attacks?

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