How Does a Decentralized Oracle Network Achieve Consensus on a Price?
A decentralized oracle network achieves consensus by having multiple independent nodes (data providers) source price data from various external exchanges. These nodes submit their data to a smart contract, which aggregates the values and uses a median or weighted average to determine the final, accepted price.
This distributed approach makes it extremely difficult for any single party to manipulate the price.
Glossar
Decentralized Oracle Network
Network ⎊ A Decentralized Oracle Network (DON) facilitates secure and verifiable data feeds from external sources to blockchain environments, crucial for smart contract functionality within cryptocurrency derivatives and options trading.
Oracle Network
Infrastructure ⎊ This refers to the decentralized network of nodes responsible for securely fetching, aggregating, and broadcasting external market data necessary for derivative pricing and settlement.