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What Are the Risks of a Centralized Oracle in a Decentralized Derivatives Platform?

A centralized oracle presents a single point of failure and a high risk of intentional price manipulation, leading to incorrect settlements or liquidations.
Greeks.Live14.11.25

What Are the Risks of a Centralized Oracle in a Decentralized Derivatives Platform?

The primary risk of a centralized oracle is a single point of failure and potential for manipulation. If the single entity providing the price feed is compromised or acts maliciously, they can intentionally feed an incorrect price to the derivatives platform.

This manipulated price can be exploited for massive profit, such as triggering favorable liquidations or incorrect settlements. A centralized oracle also makes the platform vulnerable to regulatory pressure or downtime.

How Can a Malicious Oracle Attack a Derivatives Platform?
What Are the Risks Associated with Relying on a Single Oracle?
Why Is a Single, Centralized Oracle a Potential Point of Failure?
What Are the Security Risks Associated with Relying on a Single Oracle for Options Data?

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