How Do Options Platforms Handle Oracle Downtime or Latency?
Platforms implement contingency plans to handle oracle failures. This often includes a circuit breaker mechanism that pauses trading or settlement if the oracle fails to update within a set timeframe.
Some platforms also use a backup oracle or a time-weighted average price (TWAP) mechanism to smooth out sudden latency spikes. This protects users from settlement at an unfair price during an outage.
Glossar
Options Platforms
Architecture ⎊ Options platforms, within the cryptocurrency derivatives landscape, represent the technological infrastructure enabling the creation, listing, and trading of options contracts referencing digital assets.
Oracle Downtime
Downtime ⎊ Oracle Downtime signifies a period during which the decentralized price feed fails to deliver timely or accurate data to the smart contracts governing crypto derivatives, effectively halting their ability to execute critical functions.
Circuit Breaker Mechanism
Intervention ⎊ Circuit breaker mechanisms, within cryptocurrency, options trading, and financial derivatives, represent pre-defined automated responses to extreme market volatility or disruptive events.