Definition ∞ A Price Oracle Attack is a malicious exploit targeting the data feeds that provide real-world asset prices to smart contracts on a blockchain. Attackers manipulate these external data sources to feed false price information to a decentralized application, enabling them to execute trades or liquidate assets at incorrect valuations for illicit gain. This compromises the integrity of financial operations.
Context ∞ Price oracle attacks represent a critical vulnerability in decentralized finance, frequently resulting in significant financial losses for protocols and users. News reports often detail how attackers exploit weaknesses in oracle design, such as reliance on single data sources or low liquidity pairs. The industry is actively developing more robust, decentralized oracle networks with multiple data providers and aggregation mechanisms to mitigate this threat.
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