How Does an Oracle Network Handle Conflicting Data Submissions from Different Nodes?
Oracle networks handle conflicting data submissions through a consensus mechanism, most commonly by calculating the median of all submitted data points. The median price is used because it is statistically robust, meaning a small number of malicious or outlier submissions will not significantly skew the final aggregated price.
Nodes that submit data far from the median are typically flagged and may face slashing.
Glossar
Conflicting Data Submissions
Discrepancy ⎊ Conflicting data submissions within cryptocurrency, options trading, and financial derivatives represent inconsistencies arising from multiple sources reporting differing values for the same underlying data point.
Nodes
Architecture ⎊ Nodes, within distributed ledger technology, represent specific points of data storage and processing capacity integral to network operation, differing from centralized systems through inherent redundancy and decentralization.
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.