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How Does a Decentralized Exchange Handle a Sudden, Temporary Oracle Outage?

A DEX pauses liquidations and reverts to the last good price or a fallback oracle to protect funds during a temporary outage.
Greeks.Live20.11.25

How Does a Decentralized Exchange Handle a Sudden, Temporary Oracle Outage?

A decentralized exchange (DEX) typically implements safeguards for oracle outages. It may revert to the last known good price, temporarily halt all liquidations and high-risk operations, or switch to a fallback oracle.

The system is designed to prioritize the protection of user funds over the continuous operation of high-risk functions. Trading may continue, but functions dependent on the oracle, like margin calls, are paused until the feed is restored.

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