How Does a Derivatives Exchange Use Multiple Oracles to Prevent Unfair Liquidation?

A responsible derivatives exchange uses a composite index price derived from multiple, independent oracle feeds that source data from several high-liquidity exchanges. This multi-oracle approach prevents a price anomaly or manipulation on a single exchange from causing mass, unfair liquidations.

By aggregating data, the exchange ensures the liquidation trigger is based on a robust, market-wide fair price, not a manipulated spot price.