Why Is a Single-Source IV Oracle Highly Susceptible to Manipulation?

A single-source Implied Volatility (IV) oracle is vulnerable because an attacker can manipulate the price of a single, often low-liquidity, options contract used by the oracle. By driving up or down the premium of that single option, the attacker can force the oracle to report a false IV value.

This false IV can then be used to misprice other options or trigger unfair liquidations in the protocol, resulting in a profitable exploit.