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What Is the Trade-off between Using a TWAP and a Spot Price Oracle?

TWAP is secure but less responsive; spot price is responsive but highly vulnerable to single-block price manipulation.
Greeks.Live16.11.25

What Is the Trade-off between Using a TWAP and a Spot Price Oracle?

The trade-off is between security and responsiveness. A Time-Weighted Average Price (TWAP) oracle is highly secure against flash loan and single-block price manipulations because it averages the price over time, making it robust.

However, it suffers from lower responsiveness, as it lags behind rapid market changes. A spot price oracle is highly responsive, reflecting the current market price immediately, but it is highly vulnerable to manipulation within a single block, making it less secure for high-value financial operations.

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