Oracle Manipulation Attacks Rising: A Unique Concern for DeFi

March 10, 2023

As such, we’ll refer to these unique instances as oracle manipulation attacks. Bad actors typically carry out oracle manipulation attacks by using large amounts of cryptocurrency to quickly increase the trading volume of low-liquidity tokens on the targeted DeFi protocol, which can lead to fast, significant price increases not reflective of the wider market. Overall, we estimate that in 2022, DeFi protocols lost $386.2 million in 41 separate oracle manipulation attacks. Some attackers have tried to argue that oracle manipulation attacks aren’t criminal in the same way a more straightforward hack is. Below, we’ll look at Eisenberg’s infamous million attack on Mango Markets as an example of how oracle manipulation attacks can work.