External Data Attacks

Definition ∞ External data attacks involve manipulating information fed into a smart contract from outside the blockchain, typically through oracles. If an oracle provides incorrect or malicious data, the smart contract will execute based on flawed premises, leading to unintended and often detrimental outcomes. These attacks can result in financial losses, incorrect liquidations, or other system abuses. Securing external data feeds is paramount for the reliability of decentralized applications.
Context ∞ External data attacks, also known as oracle manipulation, are a significant vulnerability in decentralized finance protocols that rely on real-world data for their operations. The key discussion involves the decentralization and security of oracle networks to prevent single points of failure or manipulation. Future advancements focus on aggregation of data from multiple sources, reputation systems for oracles, and cryptographic proofs for data integrity.