Aggregated Price Feeds
Aggregated price feeds are a method of data delivery where multiple independent sources are combined to produce a single, resilient price point for a protocol. By gathering data from various exchanges and decentralized nodes, the protocol mitigates the risk of relying on a single, potentially manipulated or malfunctioning source.
This aggregation typically involves taking a median value to filter out outliers or erroneous data points. This process is essential for derivatives and lending, as it provides a stable reference for calculating collateral ratios and triggering liquidations.
It acts as a defense against local price anomalies that could otherwise cause unnecessary liquidations or allow for exploitation. The robustness of the aggregation method directly correlates with the security of the protocol.