What Is the Trade-off between Data Latency and Data Security in Oracle Design?
There is a fundamental trade-off between data latency and data security. To achieve lower latency, an oracle network might reduce the number of nodes required for consensus or lower the reporting threshold.
However, this decreases the security and manipulation resistance of the data. Conversely, increasing security by requiring more nodes to sign a report increases the time required for aggregation and transmission, leading to higher latency.
Glossar
Manipulation Resistance
Resilience ⎊ The capacity of cryptocurrency markets, options trading platforms, and financial derivative structures to withstand and recover from manipulative actions represents a critical facet of sustainable market integrity.
Data Latency
Delay ⎊ In cryptocurrency, options trading, and financial derivatives, delay represents the temporal discrepancy between an event's occurrence and its reflection in market data or execution.
Data
Volatility ⎊ Data within cryptocurrency, options trading, and financial derivatives represents the quantified degree of price fluctuation over a defined period, serving as a critical input for option pricing models and risk assessment.
Data Security
Cryptography ⎊ Data security within cryptocurrency, options trading, and financial derivatives fundamentally relies on cryptographic protocols, ensuring the integrity and confidentiality of transactions and data at rest.
Trade-off
Balance ⎊ In derivatives modeling, this involves the necessary balancing act between maximizing potential yield and managing downside risk exposure through hedging instruments.