### TWAP Oracle Attacks: Easier Done than Said?

Torgin Mackinga, Tejaswi Nadahalli, and Roger Wattenhofer

##### Abstract

Blockchain on-chain'' oracles are critical to the functioning of many Decentralized Finance (DeFi) protocols. We analyze these oracles for manipulation resistance. Specifically, we analyze the cost of manipulating on-chain time-weighted average price (TWAP) oracles that use the arithmetic mean. It has been assumed that manipulating a TWAP oracle with the well-known multi-block attack is expensive and scales linearly with the length of the TWAP. We question this assumption with two novel results. First, we describe a single-block attack that works under the same setting as the multi-block attack but costs less to execute. Second, we describe a multi-block MEV (MMEV) style attack where the attacker colludes with a miner/proposer who can mine/propose two blocks in a row. This MMEV style attack makes oracle manipulation orders of magnitude cheaper than previously known attacks. In the proof-of-work setting, MMEV can be done by selfish mining even with very low shares of hashpower.

Available format(s)
Category
Cryptographic protocols
Publication info
Published elsewhere. ICBC 2022
Keywords
TWAP OraclesMEVDeFi
Contact author(s)
tejaswin @ ethz ch
History
Short URL
https://ia.cr/2022/445

CC BY

BibTeX

@misc{cryptoeprint:2022/445,
author = {Torgin Mackinga and Tejaswi Nadahalli and Roger Wattenhofer},
title = {TWAP Oracle Attacks: Easier Done than Said?},
howpublished = {Cryptology ePrint Archive, Paper 2022/445},
year = {2022},
note = {\url{https://eprint.iacr.org/2022/445}},
url = {https://eprint.iacr.org/2022/445}
}

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