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What Is the Risk of “Oracle Manipulation” in a Decentralized Derivatives Exchange?

Oracle manipulation is the risk that an attacker can temporarily and artificially influence the price feed provided by the oracle. In a decentralized derivatives exchange, this can lead to immediate and unfair liquidations of leveraged positions or the fraudulent settlement of contracts.

An attacker might use a flash loan to briefly manipulate the spot price on a single exchange that a vulnerable oracle relies on, causing significant financial loss for users.

How Does a Faulty Oracle Price Feed Impact an In-the-Money Options Contract?
What Are the Risks of Relying on a Single Data Feed for an Options Smart Contract?
How Does Oracle Latency Affect the Execution of an Options Trade?
What Is the Risk of an “Oracle Manipulation Attack”?