What Is an Oracle and Why Is It Necessary for Many Smart Contracts?
An Oracle is a third-party service that provides smart contracts with external information, such as real-world prices, weather data, or event results. Smart contracts on a blockchain cannot access off-chain data natively.
Oracles bridge this gap, ensuring that the contract's execution is based on accurate, verified external inputs.
Glossar
Decentralized Oracle Networks
Architecture ⎊ Decentralized Oracle Networks (DONs) represent a robust infrastructure designed to provide reliable external data to smart contracts without relying on a single, centralized entity.
Oracles
Attestation ⎊ Oracles function as critical infrastructure within decentralized finance, bridging the gap between on-chain smart contracts and external data sources to enable complex financial instruments.
Data Providers
Source ⎊ Data providers, within the context of cryptocurrency derivatives, options trading, and financial derivatives, represent specialized entities furnishing raw or processed market data crucial for pricing models, risk management, and algorithmic trading strategies.
Smart Contracts
Function ⎊ Smart contracts are self-executing agreements with the terms of the agreement directly written into lines of code, residing on a decentralized ledger.