I'm not sure how to post images here. But we have some in the description of the project here: https://makers.bolt.fun/project/10101
This is an interesting attack vector.
To avoid this the idea is to have several oracles which behave exactly like multisig on the bitcoin blockchain. For example, 2 of 3 oracles which need to agree on the BTC/USD price on various bitcoin exchanges.
This way the attack you were describing is harder to accomplish (but not impossible).
There is new exciting research on oracle signatures which would make signatures and verification more efficient and we could easily have NofM oracles with N>10 or more.
We are aware that a single oracle solution does not scale and is a challenge in regards to trust. That's why our goal is to have a multi-oracle solution.
Disclaimer: For ItchySats we were using a single oracle at the moment run by @LLFOURN.
To the best of our knowledge, this is the first fully noncustodial approach.
In theory you can get any currency. The hard part will be to get the liquidity, i.e. you always need 2 parties for this, one who goes long and one who goes short. The one who goes short is stable in the currency of choise, e.g. if you have BTCKES, you need someone who wants to go long BTC against KES.
GENESIS