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What Is an Oracle’s Role in a Decentralized Margin Trading Protocol?

To provide real-time asset prices for collateral valuation and to trigger margin calls or liquidations to maintain protocol solvency.
Greeks.Live05.11.25

What Is an Oracle’s Role in a Decentralized Margin Trading Protocol?

In margin trading, the oracle provides continuous, reliable price feeds for all assets used as collateral and those being traded. Its primary role is to monitor the collateralization ratio of a user's position.

If the underlying asset's price drops, the oracle triggers a margin call or automatic liquidation to protect the protocol's solvency. Timeliness and accuracy are paramount to prevent bad debt accumulation.

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