TECHNICAL CONCEPTS
Oracle (Price Oracle)
Definition
An oracle is a service that provides real-world data to blockchain applications. In DeFi, price oracles supply current asset prices for lending protocols, derivatives, and other applications that need off-chain data.
Example
Example
Chainlink oracles provide ETH/USD prices to lending protocols to determine collateral values and liquidation thresholds.
Risks to Consider
Risks
- Oracle manipulation
- Data lag
- Single point of failure
Common Questions
Why can't smart contracts get price data directly?
Blockchains can't access external data by design. Oracles act as bridges to bring real-world information on-chain securely.
