Skip to main content

Why Do Exchanges Use a Multi-Exchange Average for the Index Price?

A multi-exchange average is used to create a robust and reliable benchmark for the underlying asset's spot price. Averaging prices across several major, high-liquidity exchanges minimizes the risk of price manipulation on a single exchange.

This integrity is critical because the Index Price is the foundation for the funding rate calculation and, indirectly, the Mark Price, which is used for liquidation.

What Is the Advantage of Using a Median Price over an Average Price in Data Aggregation?
How Do Time-Weighted Average Prices (TWAPs) Mitigate Oracle Manipulation Risks?
How Is the Index Price Protected from Exchange Outages or Manipulation?
How Does a Volume-Weighted Average Price (VWAP) Differ from a Simple Average in Settlement?