Overview
Oracle manipulation is an attack that distorts price data used by smart contracts to trigger unfair liquidations or arbitrage. It exploits thin liquidity in price sources. It has caused major DeFi losses.
How It Works
Attackers manipulate the price of an asset on a low-liquidity venue that feeds an oracle, then exploit the incorrect price on the target protocol. Time-weighted and decentralized oracles resist manipulation. Flash loans amplify the attack.
Why It Matters
Oracle manipulation undermines the integrity of lending, derivatives, and stablecoins. It is a central security concern in DeFi. Robust oracle design is critical to protocol safety.
Related Concepts
Oracle Manipulation relates to Oracles, Flash Loans, and Liquidation. It is countered by reliable price feeds.