Oracle dependency describes a smart contract’s reliance on external data feeds to execute its functions. This refers to the situation where a blockchain-based smart contract requires information from outside its native network, such as real-world prices, event outcomes, or weather data, to operate correctly. Oracles act as intermediaries, providing verified external data to the blockchain. This dependency introduces a potential vulnerability, as the reliability and security of the oracle directly impact the integrity of the dependent smart contract.
Context
The discussion surrounding oracle dependency highlights the critical need for secure and reliable data sources for decentralized applications. A key debate involves mitigating risks associated with single points of failure or data manipulation by malicious oracles. Future developments will likely focus on decentralized oracle networks, reputation systems for data providers, and cryptographic proofs to enhance the trustworthiness and resilience of external data inputs.
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