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Jul 28, 2019

Market dumps into thin books on a single fiat exchange (Bitstamp, Coinbase Pro, Kraken) are always oracle attacks (b/c a best-execution oriented seller would simply sell across all venues over a window). Perhaps time to discuss what safeguards these exchanges should consider.

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Zhu Su

@zhusu

Jul 28, 2019

Agree. Yeah the thing is that exchanges aren't incentivized to police these oracle attacks b/c it actually brings much-needed/sorely-missed spot volume to their own venue (while they can argue the loss occurs on the derivatives exchanges). So only industry-pressure would do it.

Replying to

and

Oracles are only responsible for reporting the truth, not for controlling events or even what people do with the truth. To spot exchanges, the behavior is neither good nor bad. A robust index, like

@CFBenchmarks

is much less vulnerable to being influenced by a market anomaly.

5:54 AM · Jul 28, 2019Twitter Web App

Replying to

So, it is not so much an attack on the oracle as it is the exploitation of a naive counter party. The sucker accepted an unknown, variable price, which turns out could, under the terms, be set by the other contract participant. Oops. Not the oracle's fault.

Zhu Su

@zhusu

Jul 28, 2019

I think the word "fault" here isn't really a useful one, I agree. Main question is do underlying spot exchanges that are often used as oracles have any real or perceived esponsibility to the community to prevent this behavior?

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Replying to

Agreed. The BLX by BraveNewCoin is probably a better option however