How Does an Oracle's Latency or Inaccuracy Contribute to Liquidation Cascades? ⎊ Path

How Does an Oracle’s Latency or Inaccuracy Contribute to Liquidation Cascades?

An oracle provides the price feed for collateral assets. If the oracle's price is inaccurate (stale or manipulated), it can cause liquidations to be triggered at the wrong time.

Latency means the price is not updated fast enough during a crash, leading to a backlog of liquidations that hit the market simultaneously, exacerbating the price drop and triggering a cascade.

How Does Oracle Latency Affect the Execution of an Options Trade?

What Is ‘Jitter’ and How Does It Contribute to Latency-Related Fill Rate Issues?

What Is the Relationship between Liquidation and Systemic Risk?

How Do Automated Liquidation Bots Contribute to the Speed of a Cascade?

How Does High Network Latency Contribute to Stale Data Risk?

How Can Oracle Failure Lead to Cascading Liquidations in a Derivatives Exchange?

What Is a ‘Liquidation Cascade’ and How Can It Be Front-Run?

What Is a “Stale Price” and How Does It Relate to Oracle Updates?