What Role Do Oracles Play in Providing Reliable Market Data to Smart Contracts for Options Trading?

Oracles act as secure bridges between the blockchain and the real world, providing essential off-chain data, such as asset prices, to smart contracts for options trading. Since blockchains cannot access external data directly, oracles fetch and verify this information before feeding it to the smart contract.

For an options contract to execute correctly, it needs reliable data on the underlying asset's price at expiration. Decentralized oracle networks aggregate data from multiple sources to prevent manipulation and ensure the data is accurate and trustworthy.