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What Is a Volume-Weighted Average Price (VWAP) and Why Is It Used?

An average price weighted by trading volume, used by oracles to provide a manipulation-resistant, liquidity-reflecting price for derivatives.
Greeks.Live05.11.25

What Is a Volume-Weighted Average Price (VWAP) and Why Is It Used?

VWAP is a trading benchmark that calculates the average price of an asset over a specified time, weighted by the total trading volume at each price level. Oracles use VWAP because it gives more significance to prices from exchanges with higher liquidity and larger trade volumes.

This makes the price feed much harder to manipulate with low-volume trades, ensuring a more accurate and robust market price for derivatives settlement.

How Are “Time-Weighted Average Prices” (TWAPs) Used to Improve Oracle Security?
What Is a Time-Weighted Average Price (TWAP) Oracle?
How Do TWAP and VWAP Oracles Source Their Price and Volume Data?
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