Oracle manipulation

DeFi contracts read coin prices from an oracle, for example to value collateral in lending.

What it means

If the oracle relies on one thin pool, a large trade, often paid for with a flash loan, can push its price for a moment so that someone can borrow or liquidate at the wrong value.

What to watch

Which price sources an oracle uses, whether it averages over time, and how much liquidity sits behind each source.

How Compass-Alpha uses it

Background only; not used in any figure on Compass-Alpha.