# What Is a "Deviation Threshold" and How Does It Prevent Stale Prices? ⎊ Path

**Published:** 2025-12-05
**Author:** Greeks.live
**Categories:** Path

---

## What Is a “Deviation Threshold” and How Does It Prevent Stale Prices?

A deviation threshold is a percentage change in the asset's price that must be exceeded to trigger a new oracle update. For example, a 0.5% threshold means the oracle only updates if the price has moved by at least 0.5% since the last update.

This mechanism prevents stale prices by forcing an update when the market price has moved materially, while saving on gas costs by avoiding unnecessary updates during stable periods.

- [What Is a “Deviation Threshold” in Oracle Price Feeds?](https://learn.greeks.live/path/what-is-a-deviation-threshold-in-oracle-price-feeds/)

- [What Is a “Liquidity-Weighted” Index Methodology and How Does It Address Stale Prices?](https://learn.greeks.live/path/what-is-a-liquidity-weighted-index-methodology-and-how-does-it-address-stale-prices/)

- [How Do Bid-Ask Spread Checks Relate to Identifying Stale Prices?](https://learn.greeks.live/path/how-do-bid-ask-spread-checks-relate-to-identifying-stale-prices/)

- [How Does a ‘Deviation Threshold’ Affect a Data Feed Update?](https://learn.greeks.live/path/how-does-a-deviation-threshold-affect-a-data-feed-update/)

- [What Is a “Liquidation Event” and How Can It Trigger a Flash Crash?](https://learn.greeks.live/path/what-is-a-liquidation-event-and-how-can-it-trigger-a-flash-crash/)

- [Can an Oracle Itself Be Front-Run If Its Price Update Is Visible in the Mempool?](https://learn.greeks.live/path/can-an-oracle-itself-be-front-run-if-its-price-update-is-visible-in-the-mempool/)

- [How Does a High Leverage Ratio Increase the Risk of Forced Liquidation?](https://learn.greeks.live/path/how-does-a-high-leverage-ratio-increase-the-risk-of-forced-liquidation/)

- [Can a Deviation Threshold Be Bypassed by a Flash Loan Attack?](https://learn.greeks.live/path/can-a-deviation-threshold-be-bypassed-by-a-flash-loan-attack/)

## Glossar

### [Threshold](https://learn.greeks.live/area/threshold/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Barrier ⎊ A threshold, within cryptocurrency derivatives and options trading, fundamentally represents a price level that must be breached for a contract to become active or trigger a specific outcome.

### [Stale Prices](https://learn.greeks.live/area/stale-prices/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

State ⎊ Stale Prices refer to the condition where the quoted price of an asset within a decentralized exchange's liquidity pool or an oracle is significantly out of sync with the true market price on external, high-volume exchanges.

### [Deviation Threshold](https://learn.greeks.live/area/deviation-threshold/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Constraint ⎊ Deviation Threshold functions as a critical constraint within oracle systems, defining the maximum permissible percentage difference between the current on-chain price and a newly calculated aggregate off-chain price.

### [Avoiding Unnecessary Updates](https://learn.greeks.live/area/avoiding-unnecessary-updates/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Update ⎊ In cryptocurrency, options trading, and financial derivatives, minimizing unnecessary updates represents a core tenet of robust risk management and efficient capital allocation.

### [Deviation](https://learn.greeks.live/area/deviation/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Variance ⎊ Deviation, within cryptocurrency, options, and derivatives, represents the squared difference between an observed value and its expected value, quantifying the dispersion of potential outcomes around a central tendency.

## Discover More

### [What Does Backwardation Signal about Market Expectations of Future Prices?](https://learn.greeks.live/path/what-does-backwardation-signal-about-market-expectations-of-future-prices/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Does Backwardation Signal about Market Expectations of Future Prices?](https://learn.greeks.live/wp-content/uploads/2025/10/Reflecting-Parabolic-Curves-in-Decentralized-Finance-Option-Premium-Settlement-Dynamics.webp)

It signals a market expectation that the future spot price will be lower than the current spot price.

### [What Is the 'Checks-Effects-Interactions' Pattern and How Does It Prevent Reentrancy?](https://learn.greeks.live/path/what-is-the-checks-effects-interactions-pattern-and-how-does-it-prevent-reentrancy-2/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the 'Checks-Effects-Interactions' Pattern and How Does It Prevent Reentrancy?](https://learn.greeks.live/wp-content/uploads/2025/10/Symmetrical-Abstract-Representation-of-Bifurcated-Opciones-Execution-Dynamics-in-Digital-Asset-Swaps.webp)

Update internal state first, then call external contracts; this prevents malicious callbacks from exploiting an outdated state.

### [What Is a "Double-Spend" and How Does SHA-256 Help Prevent It?](https://learn.greeks.live/path/what-is-a-double-spend-and-how-does-sha-256-help-prevent-it/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is a "Double-Spend" and How Does SHA-256 Help Prevent It?](https://learn.greeks.live/wp-content/uploads/2025/10/Symmetrical-Bifurcation-Across-Dual-Layered-Hardware-Edge-Representing-Decentralized-Finance-Settlement-Finality.webp)

Spending the same coin twice; prevented by the irreversible, time-stamped, and cryptographically secured record of the blockchain.

### [How Does the Assumption of a Lognormal Distribution of Stock Prices Affect the Model's Accuracy?](https://learn.greeks.live/path/how-does-the-assumption-of-a-lognormal-distribution-of-stock-prices-affect-the-models-accuracy/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does the Assumption of a Lognormal Distribution of Stock Prices Affect the Model's Accuracy?](https://learn.greeks.live/wp-content/uploads/2025/10/Precision-Actuation-Mechanism-Over-Blockchain-Data-Ledger-Illustrating-Tokenized-Asset-Settlement.webp)

Real markets have "fat tails" (extreme moves), which the model's lognormal assumption under-represents, leading to mispriced risk.

### [Does High Liquidity Always Prevent a Pump and Dump, and Why?](https://learn.greeks.live/path/does-high-liquidity-always-prevent-a-pump-and-dump-and-why/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Does High Liquidity Always Prevent a Pump and Dump, and Why?](https://learn.greeks.live/wp-content/uploads/2025/10/Stylized-Assemblage-of-High-Gamma-Hedging-Instruments-in-Low-Latency-Execution-Environments.webp)

No, but it makes the scheme more costly and risky, as massive capital is needed to move the price substantially.

### [How Does a Futures Contract Allow a Mining Operation to Hedge against Rising Electricity Prices?](https://learn.greeks.live/path/how-does-a-futures-contract-allow-a-mining-operation-to-hedge-against-rising-electricity-prices/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does a Futures Contract Allow a Mining Operation to Hedge against Rising Electricity Prices?](https://learn.greeks.live/wp-content/uploads/2025/10/Abstract-Visualization-of-Digital-Asset-Custody-Module-Securing-On-Chain-Perpetual-Futures.webp)

A futures contract lets a miner lock in a future electricity price, protecting profits if market prices rise.

### [How Does Leverage Affect the Distance between the Liquidation and Bankruptcy Prices?](https://learn.greeks.live/path/how-does-leverage-affect-the-distance-between-the-liquidation-and-bankruptcy-prices/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does Leverage Affect the Distance between the Liquidation and Bankruptcy Prices?](https://learn.greeks.live/wp-content/uploads/2025/10/Modular-Derivative-Contract-Unwinding-Revealing-Stratified-Liquidity-Pool-Segregation-Mechanisms.webp)

Higher leverage narrows the price gap, increasing the risk of a position becoming bankrupt before liquidation is complete.

### [Define 'Basis Trading' and Its Relevance to Spot and Futures Crypto Prices](https://learn.greeks.live/path/define-basis-trading-and-its-relevance-to-spot-and-futures-crypto-prices/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Define 'Basis Trading' and Its Relevance to Spot and Futures Crypto Prices](https://learn.greeks.live/wp-content/uploads/2025/10/Bifurcated-Tokenized-Asset-Mechanism-Revealing-Underlying-Collateralized-Derivatives-Structure.webp)

Arbitrage strategy exploiting the price difference between the spot price and the futures price of a crypto asset.

### [How Do Flash Loan Exploits Allow Attackers to Manipulate Prices on a Decentralized Exchange?](https://learn.greeks.live/path/how-do-flash-loan-exploits-allow-attackers-to-manipulate-prices-on-a-decentralized-exchange/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Do Flash Loan Exploits Allow Attackers to Manipulate Prices on a Decentralized Exchange?](https://learn.greeks.live/wp-content/uploads/2025/10/Futuristic-Digital-Asset-Leveraged-Hedging-Mechanism-On-Polished-Automotive-Casing-Surface.webp)

Attackers borrow huge sums with no collateral to momentarily crash or inflate an asset's price, profiting from the distortion.

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