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

Inaccurate or stale prices from the oracle can trigger liquidations at the wrong time, leading to a simultaneous market dump and a cascade.
Greeks.Live12.11.25

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.

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