Oracle Risk

Oracle Dependency

All ChainSight perpetual markets rely on external price feeds to calculate funding rates and mark prices. Variance perpetuals specifically require accurate historical price data to calculate 30-day realized volatility.

Potential Oracle Failures

• Data source outages: Temporary unavailability of price feeds

• Calculation errors: Incorrect volatility or index computations

• Manipulation attempts: Bad actors attempting to influence oracle prices

HIP-3 Oracle Requirements

As specified in Hyperliquid's documentation, builders must:

• Maintain reliable oracle infrastructure

• Configure appropriate price bands and sanity checks

• Face slashing penalties for oracle manipulation

Trader Protections

Hyperliquid's core infrastructure includes:

• Position liquidations based on oracle mark prices

• Funding rate calculations using builder-provided feeds

• Emergency pause mechanisms for extreme oracle deviations