> For the complete documentation index, see [llms.txt](https://docs.txflow.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.txflow.com/perp/mark-price-and-oracle-price.md).

# Mark Price and Oracle Price

TxFlow uses two reference prices to ensure market integrity and prevent manipulation.

<table><thead><tr><th>Price</th><th width="280.765625">Source</th><th>Used for</th></tr></thead><tbody><tr><td><strong>Oracle Price</strong></td><td>Weighted median of spot prices from major CEXs</td><td>Funding rate calculation, slippage protection</td></tr><tr><td><strong>Mark Price</strong></td><td>Oracle Price + 30-second smoothed premium</td><td>Liquidations, unrealized PnL, margin, TP/SL triggers</td></tr></tbody></table>

### Oracle Price

The Oracle Price is the external spot reference for a market. It is fully independent of TxFlow's order book, making it highly resistant to manipulation.

**Calculation:**

```
Oracle Price = Weighted Median(P₁, P₂, ..., Pₙ)
```

Where `P₁...Pₙ` are spot mid-prices from major CEXs (e.g., Binance, Coinbase, OKX, Kraken), weighted by each exchange's trading volume and reliability.

* **Update frequency:** \~every 3 seconds, published by validators
* **Why weighted median?** Unlike a simple average, the median is robust against outliers — a single exchange reporting an erroneous price cannot skew the result.

### Mark Price

The Mark Price is TxFlow's fair-value estimate of the perpetual contract. It is derived from the Oracle Price plus a smoothed market premium that filters out short-term noise.

**Calculation:**

```
Mark Price = Oracle Price + Average Premium
```

Where **Average Premium** is the moving average of:

```
Average Premium = Average of ((bid 1 + ask 1) ÷ 2 − Oracle Price)
```

Sampled every second over a **30-second window** (`= 30 samples`).

* **Update frequency:** \~every 3 seconds, synced with Oracle updates
* **Why include premium?** It reflects TxFlow's market sentiment relative to spot. Smoothing over 30 seconds prevents manipulation via short-term order book spoofing.

### When each price is used

<table><thead><tr><th width="222.01953125">Use Case</th><th width="124.015625">Price Used</th><th width="462.32421875">Reason</th></tr></thead><tbody><tr><td>Liquidations</td><td>Mark Price</td><td>Prevents manipulation; smooths volatility</td></tr><tr><td>Unrealized PnL</td><td>Mark Price</td><td>Fair valuation consistent with liquidation logic</td></tr><tr><td>Margin requirements</td><td>Mark Price</td><td>Consistent with liquidation logic</td></tr><tr><td>Funding rate calculation</td><td>Oracle Price</td><td>Independent reference; prevents funding manipulation</td></tr><tr><td>Slippage protection (market orders)</td><td>Oracle Price</td><td>Detects extreme execution prices vs. external reference</td></tr><tr><td>TP/SL triggers</td><td>Mark Price</td><td>Consistent with PnL calculations</td></tr></tbody></table>

### Related Pages

<table><thead><tr><th width="154.7265625">Pages</th><th>Description</th></tr></thead><tbody><tr><td><a href="/pages/z986rTaJ8Z98daTE3x0N">Liquidation</a></td><td>Detailed liquidation mechanics</td></tr><tr><td><a href="/pages/JCOc7dDxeSdSQSf2US8e">Funding</a></td><td>Funding fees</td></tr></tbody></table>


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