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What Is a Time-Weighted Average Price (TWAP) and Why Is It Used in DeFi Oracles?

TWAP averages price over time to smooth volatility and prevent manipulation for reliable derivative settlement.
Greeks.Live17.11.25

What Is a Time-Weighted Average Price (TWAP) and Why Is It Used in DeFi Oracles?

A TWAP is a price calculated by averaging the asset's price over a specific time interval. DeFi Oracles use TWAP to prevent sudden price manipulation from flash loans or large single trades.

By smoothing out short-term volatility, TWAP provides a more robust and reliable price for derivative settlements.

How Is a ‘Time-Weighted Average Price’ (TWAP) Used in Settlement?
How Does a TWAP Oracle Differ from a Volume-Weighted Average Price (VWAP) Oracle?
What Is a Volume-Weighted Average Price (VWAP) and Why Is It Used?
How Does a Time-Weighted Average Price (TWAP) Oracle Mitigate Price Manipulation for Derivatives?

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