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How Do Decentralized Exchanges Mitigate the Risk of Single-Exchange Price Manipulation?

By aggregating TWAP data from multiple high-liquidity exchanges, they dilute the impact of a temporary price manipulation on a single venue.
Greeks.Live20.11.25

How Do Decentralized Exchanges Mitigate the Risk of Single-Exchange Price Manipulation?

Decentralized exchanges (DEXs) mitigate the risk of single-exchange price manipulation by using oracles that aggregate data from multiple, high-liquidity exchanges. By calculating a Time-Weighted Average Price (TWAP) across numerous sources, they ensure that a temporary price spike on one low-volume exchange does not affect the final price feed.

This multi-source aggregation makes it prohibitively expensive for an attacker to manipulate the price across all necessary venues simultaneously.

How Do Oracles Ensure the Data They Provide Is Accurate and Tamper-Proof?
How Does a Decentralized Exchange’s Liquidity Affect the Effectiveness of a TWAP Oracle?
How Does the Number of Exchanges Listing an Asset Affect Its Liquidity and Spread?
What Is a Volume-Weighted Average Price (VWAP) and How Does It Differ from TWAP?

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