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Google Misreported EUR/PLN and USD/PLN Price Feed by 20%. How does an Oracle Protect Against Such a Black Swan? 🦢

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It must have been an intense NYE celebration, right? In the late afternoon of January 1, 2024, the Google search engine began displaying unusually high values for the Euro and Dollar exchange rate against the Polish zloty, showing a spike to PLN 5.56. This was a significant and sudden increase of over PLN 1.21 or 28% from around PLN 4.34, surpassing the previous highs seen in March 2022 during the Russian invasion of Ukraine. The same happened with the dollar rate, which increased by over PLN 1.09, i.e. 28%, in just 5 hours. from almost PLN 3.94 to PLN 5.03, which was one of the highest levels in history. Hardly ever can we see such price movements on the FOREX market.

This abrupt change sparked widespread confusion and speculation online. Some wondered if political statements from Polish leaders like the Prime Minister and President were influencing the Euro’s value, while others feared a geopolitical event, such as a Russian missile striking Poland.

Everyone Can Have a New Year’s Hiccup, Even Google

However, the real cause turned out to be a technical glitch on Google’s part. The search engine even stopped showing current exchange rates for a time. Poland’s Finance Minister Andrzej Domański addressed the public, clarifying that the alarming zloty rate was due to a data source error, assuring that normalcy would return once Asian markets opened.

Indeed, when Asian markets opened at 11 p.m. CET, the official euro exchange rate was revealed to be PLN 4.3450, one of its lowest points since March 2020. This situation underlined the error in Google’s data and dispelled the panic caused by the earlier incorrect rates.

ByBit Exploit Potential

USDT/PLN exchange rate on ByBit

Okay, Google had a tougher moment, but nothing happened, right? Not quite so. For example, it was possible to exploit a data feed error on ByBit, one of the leading crypto exchanges, enabling users to deposit USD and immediately sell them at a price as much as 30% higher than the real market value. Interestingly, numerous individuals have effectively profited from this exploit, repeatedly depositing funds to their advantage, and posted about it on X (previously Twitter). When ByBit realized the issue, it quickly disabled PLN withdrawals and FIAT exchange. The bug is already fixed and withdrawals (at the normal rate) are possible. Some voices of disapproval appeared on X, as many view this as an unethical act and something that should be discouraged. Others point fingers at ByBit, arguing that a major cryptocurrency exchange should not directly import its rates from Google.

In our view, Google is a reliable data source. But, as the saying goes:

“Glitch happens.” ~ Forrest Gump*

* Okay, he might have used another word, but you get the point.

How can an Oracle protect against such a Black Swan?

Oracles are systems that aggregate data feeds from multiple sources and deliver it to dApps and Web3 projects. Thanks to relying on not one, but numerous data points, it can create a robust data flow. For example, RedStone tracks EUR / USD exchange rates across 9 sources at the time of writing and delivers a median to the end user, which is very difficult to manipulate. Even if one of the sources is having a hard time responding or reports a skewed value it is not utilized by the end user. Naturally, the less popular pair, the harder it is to find trusted data sources. But in many cases, as few, as 3 sources should already increase security significantly.

About RedStone

RedStone is revolutionizing the Oracles industry by implementing novel modular design and 3 tailor-made data consumption models. You can build the new generation of DeFi & Web3 protocols based on RedStone’s versatile data offering of long-tail, LP, LST, and Ecosystem-native tokens, as well as Real World Data and custom feeds.

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