What Is a “Sybil Attack” and How Can It Target Decentralized Oracles?
A Sybil attack is when a single entity creates and operates numerous fake identities or nodes within a network. In a decentralized oracle network, the attacker could use these many nodes to feed the same false data to the smart contract.
Since the contract aggregates data from multiple sources, a successful Sybil attack could corrupt the consensus, leading to the execution of the contract based on manipulated prices.
Glossar
Sybil Attack
Architecture ⎊ The Sybil attack, within cryptocurrency, options trading, and financial derivatives, exploits the inherent design vulnerabilities of distributed systems reliant on identity-based consensus.
Decentralized Oracle
Attestation ⎊ Decentralized oracles fundamentally address the challenge of bridging off-chain data to on-chain smart contracts, providing a verifiable source of truth for derivative pricing and settlement.
Target
Precision ⎊ A target, within cryptocurrency derivatives and financial markets, denotes a predetermined price level or state serving as a focal point for trading strategies and risk management protocols.