> For the complete documentation index, see [llms.txt](https://docs.tydro.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.tydro.com/v.-risk/risk-types-and-overview/price-feed-risk.md). # Price Feed Risk Tydro markets use price feeds for every position. If wrong, a position can be liquidated when it should not be, or not liquidated when it should be. This page describes the risks of bad pricing ### Why the price matters The protocol uses oracle prices to value collateral and debt and to decide when a position can be liquidated. The protocol acts on the price it is given. If that price does not reflect the real market, the protocol still acts on it. ### How feeds fail Price feeds can fail in several ways. A feed can go stale and stop updating. It can report a value that is wrong. It can be manipulated, particularly for assets whose underlying spot markets have thin liquidity, which makes those markets easier to move. The infrastructure delivering the feed can go down. The consequences fall on positions. A price reported too low can trigger liquidations that should not happen. A price reported too high, or one that fails to update during a real decline, can stop liquidations that should happen and leave the market exposed to bad debt. ### What the current safeguards cover, and what they do not Tydro prices assets from Chainlink. Chainlink aggregates prices across multiple sources, which reduces exposure to any single exchange. On top of that, Tydro applies staleness and deviation checks: if a price update is too old or moves by more than a defined threshold, it is treated as invalid. The PriceOracleSentinel adds a further layer specifically for L2 sequencer downtime. It restricts new borrows and liquidations when the Ink sequencer is unavailable, preventing the protocol from acting on prices that have not updated because the network itself is down. These controls reduce the chance of acting on a bad reading. They do not remove oracle risk. Tydro currently relies on Chainlink as its primary price source so a failure or manipulation of that source is a concentration to be aware of. {% hint style="warning" %} An oracle failure can trigger liquidations that should not happen or prevent ones that should, and either can cause loss. {% endhint %} --- # 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.tydro.com/v.-risk/risk-types-and-overview/price-feed-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.