What Is ‘Mark Price’ and How Do Oracles Contribute to Its Calculation?

The 'mark price' is an estimated fair price of a perpetual futures contract, designed to prevent unnecessary liquidations that can occur due to temporary market fluctuations or manipulation on a single exchange. Oracles contribute by providing the underlying asset's spot price, often averaged across multiple exchanges.

The mark price is typically calculated using this reliable oracle spot price combined with a decaying funding rate component.