Oracle
A service that provides external real-world data (like prices) to smart contracts on a blockchain.
Explained Simply
Blockchains cannot natively access external data — they only know what happens on-chain. Oracles bridge this gap by feeding off-chain data (prices, weather, sports scores) to smart contracts. Chainlink is the largest oracle network. DeFi protocols rely on price oracles to determine asset values for lending, liquidations, and derivatives. Oracle manipulation is a serious attack vector — if an oracle reports a wrong price, it can trigger cascading liquidations or enable exploits.
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