> For the complete documentation index, see [llms.txt](https://docs.tren.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.tren.finance/protocol/asset-risk/oracle-risk.md). # Oracle Risk Oracles play a vital role on Tren Finance, as they do on most DeFi protocols, by providing the “true” price of an asset at a given time. As an example, if asset A were to trade at $100 on one exchange while also trading at $98 on another exchange, an oracle will provide the “true” value of the asset based on its configuration. This price feed is used to trigger important functions like liquidations by providing data on what a user’s collateral is worth. Due to the important role that oracles play, they are often the subject of price manipulation attacks. For example, if an asset does not have strong buy-side liquidity, an attacker could artificially inflate the price of an asset. The attacker could then use the asset to borrow an abnormal amount of XY, leaving the protocol in debt. If an asset does not have strong sell-side liquidity, an attacker could artificially deflate the price of an asset, triggering liquidations. The attacker could then buy these liquidated positions at a discount. To mitigate against such attacks, a high level of importance is put on liquidity and both buy-side / sell-side price impact when evaluating assets, as shown in the [risk methodolgy table](/protocol/asset-risk.md#risk-methodology). Another risk mitigation method is adjusting the maximum borrowable amount of XY allocated for an isolated module. This figure will be set so that it does not exceed the potential cost of a potential price feed manipulation attack, and therefore should not be profitable. Tren Finance's [Proof-of-Liquidity](/protocol/proof-of-liquidity.md) concept also lowers the protocol's reliance on oracles by providing the true liquidatable figures of assets. As Tren Finance plans on listing a wide variety of assets and asset types, an oracle-agnostic approach is most appropriate for the protocol. Tren Finance will use a variety of oracles for price feeds, including Pyth, Chainlink, UniV3 (UniV4 upon release), and will continue to explore oracle solutions based on the different solutions that are required for each asset and isolated module. The different characteristics of each oracle, such as whether a TWAP or VWAP is used, will be assessed to analyse which oracle solution is most appropriate for a given situation. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.tren.finance/protocol/asset-risk/oracle-risk.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.