What Is an ‘Implied Volatility’ Oracle?

An implied volatility (IV) oracle provides a real-time, aggregated value for the expected future volatility of an asset, derived from the market prices of its options contracts. Unlike a standard price oracle, an IV oracle feeds a calculated metric into the blockchain.

This data is critical for decentralized options protocols to accurately price option premiums using models like Black-Scholes and for managing risk, as volatility is a key input.