Oracle Manipulation

A protocol that lends, liquidates or settles needs a price, and it gets one from an oracle. Oracle manipulation is the attack that follows: rather than breaking the protocol's own logic, the attacker moves the input the protocol trusts, so that correct code produces a wrong result. The classic form uses a thin on-chain market as the price source — a large trade shifts the quoted price for the length of a single transaction, the protocol reads the distorted figure, and the attacker borrows against inflated collateral or triggers liquidations that should not have happened. Common mitigations include averaging a price over time rather than reading an instantaneous quote, drawing on several independent sources, and refusing to act when sources disagree beyond a bound; each raises the cost of the attack rather than eliminating it. The general lesson is durable: a protocol is only as sound as the data it acts on, and a price is data.