DeFi protocols heavily depend on a few oracle networks for pricing data, creating centralization risks that deviate from the ideal of decentralization. Failures of these oracles can lead to financial losses and systemic risks within the entire DeFi landscape.
To enhance resilience, it is imperative to diversify oracle sources and explore alternative pricing mechanisms. A broader use of decentralized data feeds could safeguard against potential failures, ensuring that DeFi remains true to its core principles.
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