How Do Multiple Data Sources Help an Oracle Resist a Low-Liquidity DEX Attack?
By aggregating data from multiple, diverse sources, a decentralized oracle network can identify and disregard anomalous price spikes from a single, low-liquidity source. If an attacker manipulates one DEX, the reported price from that single source will be a massive outlier compared to the average price from all other reputable sources.
The aggregation mechanism can filter out or weigh down the outlier, ensuring the final reported price remains accurate and stable.
Glossar
Multiple Data Sources
Data ⎊ Utilizing multiple independent streams for price discovery is a fundamental security measure against single-source manipulation in decentralized finance.
Anomalous Price Spikes
Deviation ⎊ Anomalous price spikes within cryptocurrency, options, and derivatives markets represent statistically significant departures from expected price behavior, often exceeding established volatility thresholds.
Data Sources
Provenance ⎊ Data sources for professional crypto trading must be vetted for latency, integrity, and completeness, differentiating between primary exchange feeds, aggregated data vendors, and on-chain explorers.