What is an oracle?

In simple terms, Blockchain oracles are solutions that provide blockchains with off-chain information. Blockchains are rather cut-off from the outside world in that regard. Smart contracts may need certain off-chain information or events. After all, trading, as any other DeFi activity, relies on relevant and accurate information to work. Blockchain oracles fulfil that need.

Blockchain oracles are not sources of said data. They are relays that verify and authenticate off-chain information so that on-chain services could access and use it. The data itself comes in a variety of forms, from the information about transaction completion to the change in asset’s price and is submitted by data providers. Some types of oracles are not limited to relaying that information to the blockchain, but can also send it back to off-chain as well

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