Price Oracle Update Frequency

Price oracle update frequency is the rate at which the index price used by an exchange to trigger liquidations is refreshed. Because crypto markets are fragmented across many exchanges, the index price is usually a weighted average of prices from several sources.

The frequency of these updates determines how quickly the exchange reacts to market movements. If the update frequency is too low, the liquidation engine may operate on stale data, leading to delayed liquidations and increased systemic risk.

Conversely, high-frequency updates can lead to noise and false liquidations if the oracle is susceptible to price spikes on a single exchange. Balancing frequency and stability is a key challenge in oracle design, requiring robust filtering and outlier detection to ensure the price used for risk management is both accurate and timely.