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How Does Manipulation of the Spot Price Affect the Index Price Integrity?

Manipulation attempts on a single spot exchange are largely mitigated by using a multi-exchange average for the Index Price. A sudden, artificial spike on one exchange will have a diluted effect when averaged with stable prices from other exchanges.

However, a coordinated manipulation across multiple constituent exchanges could compromise the Index Price integrity, leading to an incorrect funding rate calculation and potentially unfair liquidations.

What Is the Difference between an Index Price and a Mark Price on a Perpetual Swap?
What Is the Risk of a Coordinated Regulatory Action across Multiple Jurisdictions on Mining?
Why Is It Necessary to Use a Multi-Exchange Average (Index Price) Instead of a Single Exchange’s Spot Price?
How Does a Volume-Weighted Average Price (VWAP) Differ from a Simple Average in Settlement?