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What Are the Main Types of Oracle Systems Used in DeFi?

DeFi oracles are mainly centralized (single source), decentralized (multiple sources), or hybrid (a combination of both approaches).
Greeks.Live05.11.25

What Are the Main Types of Oracle Systems Used in DeFi?

The main types of oracle systems in DeFi are centralized, decentralized, and hybrid. Centralized oracles are single entities that provide data to smart contracts, which is efficient but creates a single point of failure.

Decentralized Oracle Networks (DONs) aggregate data from multiple independent nodes to enhance reliability and prevent manipulation. Hybrid oracles combine on-chain and off-chain components to provide a balance of security, speed, and cost-effectiveness.

Each type has different trade-offs in terms of security, decentralization, and performance.

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