Automated Settlement Auditing

Automated settlement auditing refers to the use of programmed scripts or decentralized services to verify that the final settlement of a derivative contract matches the agreed-upon terms. When an option expires or a futures contract reaches maturity, the smart contract must automatically calculate the payout based on the final index price.

Auditing this process ensures that the oracle price used was accurate and that the payout logic was applied correctly without manipulation. By automating this, participants gain confidence that the protocol is functioning autonomously and fairly.

It serves as a check against potential errors in the contract's code or inaccuracies in the data feeds provided by external sources.