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How Does a Time-Weighted Average Price (TWAP) Oracle Mitigate Price Manipulation for Derivatives?

TWAP averages the price over time, making brief, malicious price spikes less influential and ensuring a robust reference price for contract execution.
Greeks.Live16.11.25

How Does a Time-Weighted Average Price (TWAP) Oracle Mitigate Price Manipulation for Derivatives?

A TWAP oracle calculates the average price of an asset over a specified time period, rather than taking a single, instantaneous price feed. This method mitigates "flash loan" and "front-running" attacks, where a malicious actor briefly manipulates the spot price to trigger an unfair liquidation or settlement.

By averaging the price over time, a large, short-lived price spike becomes less influential, ensuring a more robust and fair reference price for derivative contract execution.

What Is ‘Time-Weighted Average Price’ (TWAP) and When Is It Preferred over VWAP?
What Is a Time-Weighted Average Price (TWAP) Oracle, and Why Is It Used in Derivatives?
How Does a Time-Weighted Average Price (TWAP) Oracle Mitigate Flash Loan Attacks on a Derivatives Contract?
What Is a Time-Weighted Average Price (TWAP) Oracle and Why Is It Used?

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