QX DeFi Risks Compass
  • 💡GETTING STARTED
    • About
    • License
    • How to Give Attribution For Usage of QX DeFi Risks Compass
  • 🏦Risks in TradFI
    • Global Finance - Key Framework
    • Risk Frameworks
    • Basics I - Terminology & Concepts
  • ⛓️RISKS IN DEFI
    • Deciphering DeFi Risks
    • DeFi Risk Management
    • EEA DeFi Risk Assessment Guidelines
    • Basics II - DeFi
  • 🥷Systematic Risks
    • Market Risk
      • Defining Market Risk
      • Assessing Market Risk
      • Managing Market Risk
      • In Practice
      • Liquidity Risk
        • Defining Liquidity Risk
        • Assessing Liquidity Risk
        • Managing Liquidity Risk
        • In Practice
    • Compliance & Legal Risk
      • Defining Compliance & Legal Risk
      • Assessing Compliance Risk
      • Managing Compliance Risk
      • In Practice
    • Bridge Risk
      • Defining Bridge Risk
      • Assessing Bridge Risk
      • Mitigating Bridge Risk
      • In Practice
    • Oracle Risk
      • Defining Oracle Risks
      • Assessing Oracle Risks
      • Managing Oracle Risks
      • In Practice
  • 🥷UNSYSTEMATIC RISKS
    • Software Risk
      • Defining Software Risks
      • Assessing Software Risks
      • Managing Software Risks
      • In Practice
    • Economic/Financial Risks
      • Defining Economic Risks
      • Assessing Economic Risks
      • Managing Economic Risks
      • Tokenomics Risk
        • Defining Tokenomics Risks
        • Assessing Tokenomics Risk
        • Managing Tokenomics Risk
      • MEV Risk
        • Defining MEV Risk
        • Assessing MEV Risk
        • Managing MEV Risk
      • Credit Risk
        • Defining Credit Risk
        • Assessing Credit Risk
        • Managing Credit Risk
    • Governance Risk
      • Defining Governance Risk
      • Assessing Governance Risk
      • Managing Governance Risk
    • Standards Conformance Risks
      • Defining Standards Conformance Risks
      • Assessing Standards Conformance Risks
      • Managing Standards Conformance Risks
    • Security Risk
      • Security Risk Assessment
      • Security Risk Mitigation
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On this page
  • Oracle Risk Assessment Checklist
  • Explore
  • Uniswap V3 TWAP Oracle Risk
  • Uniswap V3 TWAP : Assessing Risk
  1. Systematic Risks
  2. Oracle Risk

In Practice

Oracle Risk Assessment Checklist

This checklist can help gauge the reliability, security, and fault-tolerance of oracles across parameters critical for managing risk exposure.

Evaluate TWP Oracle Risk:

  • Does the DeFi protocol/protocol ecosystem provide a tool to identify and quantify the costs associated with price manipulation?

Evaluate oracle architecture:

  • Is it centralized or decentralized?

  • What is the governance structure?

  • How are nodes incentivized?

  • What are the dependencies and failure points?

Analyze data flow and smart contract integration:

  • What critical on-chain decisions depend on external data?

  • How is data propagated from oracles to contracts?

  • Are appropriate data validation schemes used before contract execution?

Assess real-world performance:

  • Analyze historical uptime and response latency

  • Evaluate error rates and data accuracy metrics

  • Review incident response processes and post-mortems

Audit oracle infrastructure security:

  • Oversee pen testing procedures performed

  • Check security certificates, key management hygiene

  • Confirm monitoring against downtime and breaches

Model oracle risk scenarios:

  • Simulate exploit conditions through oracle data manipulation

  • Stress test robustness against oracle unavailability

  • Quantify potential impact via risk analysis models

Research mitigation strategies:

  • Weigh integration of redundant oracle sources

  • Explore oracle middleware, aggregator and proxy solutions

  • Stay updated on emerging standards and best practices

Explore

Uniswap V3 TWAP Oracle Risk

Uniswap V3 TWAP : Assessing Risk

PreviousManaging Oracle RisksNextSoftware Risk

Last updated 1 year ago

Chaos Labs - Omer Goldberg and Yonatan Haimowitz - Uniswap V3 TWAP: Assessing TWAP Market Risk (April 2023):

🥷
https://community.chaoslabs.xyz/uniswap/twap
https://drive.google.com/file/d/16VLIiVv6x9BHrn23Hbidzvf2vjLKgiNT/view?usp=drive_link