Consensus-Based Valuation

Consensus-Based Valuation refers to the mechanism by which decentralized networks agree on the price or value of an asset to be used for settlement, liquidation, or collateralization. Because there is no single source of truth in a decentralized system, the protocol must use a deterministic process to derive a value from multiple data sources, such as decentralized oracles.

This process must be immune to manipulation, meaning that even if some sources provide malicious data, the aggregate result remains accurate. The valuation logic must be embedded within the protocol's smart contracts, ensuring that all participants reach the same conclusion about the asset's worth at any given block height.

This is the basis for trust in derivative platforms, as it ensures that margin requirements are calculated based on a shared, verifiable price. It is the bridge between off-chain market data and on-chain financial execution.