Aggregator Deviation Threshold

An Aggregator Deviation Threshold is a mechanism used by oracles to decide when to update a price on the blockchain. Instead of updating on a fixed schedule, the oracle only updates if the price changes by more than a certain percentage.

This helps to save gas costs while still ensuring that significant price movements are captured. If the price remains stable, no update is necessary.

The threshold is set based on the asset's volatility; more volatile assets have smaller thresholds to ensure accuracy. It is a clever way to optimize the trade-off between price accuracy and network costs.

By focusing on significant movements, the oracle ensures that the protocol is always informed of relevant changes without unnecessary updates. It is a standard feature in many robust decentralized oracle systems.