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How Does ‘Market Manipulation’ Affect the Final Settlement Price?

Manipulation on a single exchange can corrupt a single-source settlement price; aggregation is the defense against this.
Greeks.Live20.11.25

How Does ‘Market Manipulation’ Affect the Final Settlement Price?

Market manipulation, such as a 'spoofing' or 'pump-and-dump' scheme, can artificially inflate or deflate the price of an asset on a specific exchange. If the oracle relies on that single, manipulated price for settlement, the final profit/loss calculation for the derivative will be unfair and incorrect.

Decentralized oracles mitigate this by aggregating data from multiple exchanges, making it exponentially more expensive to manipulate the final aggregated price.

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