Definition ∞ Off chain dependency refers to a blockchain system’s reliance on data or processes that exist outside its own distributed ledger. This situation arises when a smart contract or decentralized application requires information or an action from a source external to the blockchain itself to function correctly. Examples include price feeds from oracles, real-world event triggers, or data stored in traditional databases. Such dependencies introduce potential points of centralization and new security considerations, as the integrity of the on-chain system becomes tied to the reliability of these external sources.
Context ∞ The discussion surrounding off chain dependency often highlights the security implications and potential vulnerabilities introduced by relying on external data providers or centralized off-chain components. Debates focus on the design of robust oracle networks and verifiable computation methods to minimize trust assumptions. Future developments aim to enhance the decentralization and security of these dependencies through cryptographic proofs and more resilient oracle aggregation mechanisms, reducing the attack surface for hybrid on-chain/off-chain systems.
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