I was wondering whether and how tor prevents man-in-middle. I notice
in the paper [1] that if the attacker runs a malicious onion router
and receives a cell *extend* she would be able to reply to the proxy
with her own diffie-hellman handshake and thus be able to decrypt all
traffic targeted to the second OR in the chain and so forth. I also
notice that the proxy rotates to a new circuit once a minute, and this
somehow mitigates the number of cells of a user decrypted by a
malicious router.

[1]
Dingledine et al.
Tor: the second generation onion router


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