How Do Oracles Ensure the Data They Provide Is Accurate and Tamper-Proof?

Oracles use several methods to ensure data accuracy and integrity. Decentralized oracles aggregate data from numerous independent sources and use a consensus mechanism to agree on a single, accurate value, filtering out outliers and malicious data.

They often employ a reputation system, where data providers (nodes) must stake collateral, which can be slashed if they provide incorrect information. Cryptographic signatures are used to verify the origin of the data, ensuring it hasn't been tampered with during transmission from the source to the smart contract.