Risks associated with centralised price oracles
risks associated with centralised price oracles can be divided into two categories/cases:
- if centralised price oracle is either declared illegal or risks becoming illegal
- risk of collusion between data providers due to them no longer being subject to legal accountability
- risk of state arresting data providers or forcing them to report incorrect data
- risks of other disruptions to the centralised price oracle protocol resulting from state actions leading to incorrect oracle reports being made
- if centralised price oracles is neither illegal nor risks becoming illegal
- risk that centralised price oracle goes out of business
- risk that centralised price oracle is hacked due to its centralised design
- risk that centralised price oracle takes advantage of its position without technically violating its contract, hence can not be sued
- risk that centralised price oracle requests a payment/bribe from platforms which depend on it or threatens to cut them off
- risk that centralised price oracle decides to stop offering certain price sources due to a change in its business model
- risk that centralised price oracle (not out of malice) changes the parameters/specifications of the price feeds it offers, resulting in degraded security
If you found this interesting, have feedback or are working on something related, let’s chat: email, twitter (@distbit0), or schedule a 20 min call
Distbit
futonomous mechanism design. cryptoecon. austrian econ. epistemology. liberty.