A lending protocol uses an oracle to determine collateral value. A developer proposes using a single centralized exchange price feed to save gas costs. What is the primary risk of this approach?

The oracle will be too slow for high-frequency trading

The oracle will return prices in a different currency than the collateral

The oracle will fail to update during high network congestion

The oracle may be manipulated via a flash loan, causing incorrect liquidations

EC-CouncilBlockchain Developer Certification

Domain 7Objective 5

DeFi Protocols and Their Financial Functions BDC Practice Questions (Page 11)

Part of the Blockchain Security and DeFi Development domain, which makes up ~11% of our current practice bank.

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Questions 51–51

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A lending protocol uses an oracle to determine collateral value. A developer proposes using a single centralized exchange price feed to save gas costs. What is the primary risk of this approach?
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DeFi Protocols and Their Financial Functions BDC Practice Questions (Page 11)

Questions 51–51

A lending protocol uses an oracle to determine collateral value. A developer proposes using a single centralized exchange price feed to save gas costs. What is the primary risk of this approach?

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