# What Is an 'Implied Volatility' Oracle? ⎊ Path

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

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## 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.

- [How Does an IV Oracle Affect the ‘Greeks’ (E.g. Vega) in an Options Contract?](https://learn.greeks.live/path/how-does-an-iv-oracle-affect-the-greeks-e-g-vega-in-an-options-contract/)

- [Define “Implied Volatility” in Options Pricing](https://learn.greeks.live/path/define-implied-volatility-in-options-pricing/)

- [What Is Implied Volatility and How Does It Relate to Option Pricing?](https://learn.greeks.live/path/what-is-implied-volatility-and-how-does-it-relate-to-option-pricing/)

- [What Is the Difference between ‘Implied’ and ‘Historical’ Volatility?](https://learn.greeks.live/path/what-is-the-difference-between-implied-and-historical-volatility/)

- [What Is the ‘Implied Volatility’ and Why Is It a Key Input for Option Pricing Models?](https://learn.greeks.live/path/what-is-the-implied-volatility-and-why-is-it-a-key-input-for-option-pricing-models/)

- [What Is “Implied Volatility” in Options Trading?](https://learn.greeks.live/path/what-is-implied-volatility-in-options-trading/)

- [What Is ‘Implied Volatility’ and How Is It Derived in the Options Market?](https://learn.greeks.live/path/what-is-implied-volatility-and-how-is-it-derived-in-the-options-market/)

- [How Does Implied Volatility in Options Differ from Historical Volatility in Cryptocurrency Prices?](https://learn.greeks.live/path/how-does-implied-volatility-in-options-differ-from-historical-volatility-in-cryptocurrency-prices/)

## Glossar

### [Decentralized Options Protocols](https://learn.greeks.live/area/decentralized-options-protocols/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Protocol ⎊ Decentralized Options Protocols represent a paradigm shift in derivatives trading, leveraging blockchain technology to disintermediate traditional exchanges and clearinghouses.

### [Aggregated Value](https://learn.greeks.live/area/aggregated-value/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Synthesis ⎊ Aggregated Value, within cryptocurrency and derivatives, represents a consolidated measure of underlying asset exposure, often derived from multiple sources or instruments.

### [Implied Volatility](https://learn.greeks.live/area/implied-volatility/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Expectation ⎊ This value represents the market's consensus forecast of future asset price fluctuation, derived by reversing option pricing models using current market premiums.

### [Option Premiums](https://learn.greeks.live/area/option-premiums/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Valuation ⎊ Option premiums, within cryptocurrency derivatives, represent the price a buyer pays to a seller for the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a specific date.

## Discover More

### [What Are the Risks of Using a TWAP Oracle during Extreme Market Volatility or a 'Black Swan' Event?](https://learn.greeks.live/path/what-are-the-risks-of-using-a-twap-oracle-during-extreme-market-volatility-or-a-black-swan-event/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Are the Risks of Using a TWAP Oracle during Extreme Market Volatility or a 'Black Swan' Event?](https://learn.greeks.live/wp-content/uploads/2025/10/Bespoke-Material-Finishes-Interfacing-Layered-Asset-Allocation-Structures-Under-Extreme-Volatility-Profiling.webp)

Lagging price during volatility can delay liquidations, leading to bad debt and potential protocol insolvency.

### [Explain the Concept of 'Implied Volatility' and Its Effect on Option Pricing](https://learn.greeks.live/path/explain-the-concept-of-implied-volatility-and-its-effect-on-option-pricing/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Explain the Concept of 'Implied Volatility' and Its Effect on Option Pricing](https://learn.greeks.live/wp-content/uploads/2025/10/Reflective-Glass-Prism-Intersecting-Tokenized-Asset-Casing-Indicating-Derivatives-Pricing-Mechanism-Fluctuation.webp)

The market's forecast of future price fluctuation, directly increasing the option's premium due to a higher chance of a favorable move.

### [Why Might a Low Historical Volatility Period Be Followed by a Spike in Implied Volatility?](https://learn.greeks.live/path/why-might-a-low-historical-volatility-period-be-followed-by-a-spike-in-implied-volatility/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Why Might a Low Historical Volatility Period Be Followed by a Spike in Implied Volatility?](https://learn.greeks.live/wp-content/uploads/2025/10/Deep-Blue-Onyx-Encapsulation-Reflecting-Market-Volatility-In-Digital-Asset-Derivatives-Pricing.webp)

Low HV signals past calm; high IV signals market expectation of future turbulence, often due to anticipated breakout or event.

### [How Does a Price Feed Oracle Differ from a Randomness Oracle in Blockchain Applications?](https://learn.greeks.live/path/how-does-a-price-feed-oracle-differ-from-a-randomness-oracle-in-blockchain-applications/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does a Price Feed Oracle Differ from a Randomness Oracle in Blockchain Applications?](https://learn.greeks.live/wp-content/uploads/2025/10/Interlocking-Black-and-White-Curvilinear-Structures-Suggesting-Algorithmic-Liquidity-Pool-Mechanics.webp)

Price feeds provide continuous financial data; randomness oracles provide unpredictable numbers for non-financial applications.

### [What Is Implied Volatility and Why Is It Typically Higher for Bitcoin Options?](https://learn.greeks.live/path/what-is-implied-volatility-and-why-is-it-typically-higher-for-bitcoin-options/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is Implied Volatility and Why Is It Typically Higher for Bitcoin Options?](https://learn.greeks.live/wp-content/uploads/2025/10/Conceptual-Intersection-of-Digital-Asset-Securitization-and-Bear-Put-Option-Settlement-Dynamics.webp)

Implied volatility is the market's expected price fluctuation; Bitcoin's higher historical price swings lead to higher IV.

### [How Does the 'Time Decay' (Theta) Interact with Implied Volatility?](https://learn.greeks.live/path/how-does-the-time-decay-theta-interact-with-implied-volatility/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does the 'Time Decay' (Theta) Interact with Implied Volatility?](https://learn.greeks.live/wp-content/uploads/2025/10/Perfectly-Balanced-Leveraged-Token-Positioning-Demonstrating-Delta-Hedging-Equilibrium-In-Illiquid-Crypto-Markets.webp)

Theta is the constant loss of value due to time passing, while IV is the fluctuating component based on expected volatility.

### [In Which Market Conditions Would a TWAP Oracle Be More Reliable than a VWAP Oracle?](https://learn.greeks.live/path/in-which-market-conditions-would-a-twap-oracle-be-more-reliable-than-a-vwap-oracle/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![In Which Market Conditions Would a TWAP Oracle Be More Reliable than a VWAP Oracle?](https://learn.greeks.live/wp-content/uploads/2025/10/Asymmetrical-Volatility-Surface-Representation-in-Decentralized-Option-Primitives-Configuration.webp)

TWAP is more reliable in low liquidity or when volume data is untrustworthy, as it is not skewed by large trades.

### [What Is the Trade-off between Oracle Update Frequency and the Cost of Oracle Service?](https://learn.greeks.live/path/what-is-the-trade-off-between-oracle-update-frequency-and-the-cost-of-oracle-service/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Trade-off between Oracle Update Frequency and the Cost of Oracle Service?](https://learn.greeks.live/wp-content/uploads/2025/10/Decentralized-Autonomous-Organization-Governance-Structure-High-Frequency-Algorithmic-Trading-Mechanism-Visualization.webp)

Frequency uparrow → Freshness uparrow → Cost uparrow (Cost-Benefit Analysis)

### [Why Might an Option's Implied Volatility Be Higher than Its Historical Volatility?](https://learn.greeks.live/path/why-might-an-options-implied-volatility-be-higher-than-its-historical-volatility/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Why Might an Option's Implied Volatility Be Higher than Its Historical Volatility?](https://learn.greeks.live/wp-content/uploads/2025/10/Metallic-Replicating-Disks-Suggesting-Impermanent-Loss-Mitigation-in-Decentralized-Finance-Mechanisms.webp)

IV is higher than HV when the market anticipates future volatility-inducing events, even if the past has been calm.

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**Original URL:** https://learn.greeks.live/learn/what-is-an-implied-volatility-oracle/
