Oracle Deviation Thresholds

Oracle deviation thresholds are technical constraints set within smart contracts to determine when a price update should be accepted. These thresholds define a percentage change in price that must be exceeded before the oracle pushes a new update to the blockchain.

By requiring a significant movement, protocols can save on gas costs and reduce the frequency of updates. However, if the threshold is set too wide, it leaves the protocol vulnerable to stale price attacks where the on-chain price remains static while the market price moves significantly.

Balancing the frequency of updates against the cost of gas is a core challenge in protocol design. Proper calibration of these thresholds is essential for protecting the system from latency-based exploits.