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What Mechanism Does a Smart Contract Use to Ensure the Final Cash Settlement Amount Is Correct?

It uses the oracle's time-stamped settlement price to calculate the difference from the strike price for automatic transfer.
Greeks.Live05.11.25

What Mechanism Does a Smart Contract Use to Ensure the Final Cash Settlement Amount Is Correct?

The smart contract relies on a verified, time-stamped price from a reliable oracle at the exact moment of expiration. The contract's code then calculates the difference between the derivative's strike price and the oracle-provided settlement price.

This difference is the final cash settlement amount, which the contract automatically transfers from the loser's collateral to the winner's wallet.

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