Oracles

Smart contracts are deterministic, but they are also isolated. A contract cannot directly look out at the world and ask for the latest ETH price, sports result, or treasury bill yield on its own.

Oracles bridge that gap by delivering outside data into an on-chain format that contracts can consume. In DeFi, that data often determines borrowing power, liquidations, settlement logic, and payouts.

Reliable oracle design is hard because fresh data, decentralization, and manipulation resistance can pull in different directions. Fast updates help accuracy, but poorly sourced updates can still be wrong.

When users evaluate a DeFi protocol, they should ask not only whether the contract is audited, but also where its critical data comes from and how that feed behaves during volatile or illiquid market conditions.