How Does a Multi-Signature Wallet Enhance the Security of an Oracle Update Process?

A multi-signature (multisig) wallet requires a transaction to be approved by a majority of pre-selected private key holders (signers) before it can be executed. When used for an oracle, it means that no single person or entity can unilaterally update the price feed to manipulate the market.

This decentralizes the control over critical data, significantly reducing the risk of a single point of failure, collusion, or a hack, thus enhancing the security and trustlessness of the derivative protocol.