Off-Chain Price Aggregation

Off-chain price aggregation is the process of collecting data from various centralized exchanges and calculating a median or weighted average before submitting it to the blockchain. This method is used to filter out noise and prevent manipulation by a single source.

However, the aggregation process itself introduces a time delay and a reliance on the honesty of the aggregators. If the aggregation logic is flawed or the data sources are compromised, the entire derivative protocol receives inaccurate price data.

It is a critical layer in the oracle architecture.