Data Oracle

Definition ∞ A Data Oracle is a mechanism that supplies external information to a blockchain, enabling smart contracts to interact with real-world data. Blockchains are deterministic systems, meaning they cannot inherently access information outside their network. Oracles bridge this gap by securely fetching and verifying off-chain data, such as price feeds, weather data, or event results. This functionality greatly expands the utility and application scope of decentralized applications.
Context ∞ Data Oracles are consistently featured in cryptocurrency news, particularly concerning decentralized finance (DeFi) and the security of smart contracts. The reliability and integrity of these oracles are critical, as their compromise can lead to significant financial losses within DeFi protocols. Ongoing developments focus on creating more robust, decentralized, and secure oracle networks to prevent manipulation and ensure accurate data delivery.