Oracle
A service that supplies off-chain real-world data (e.g. asset prices) to smart contracts on-chain.
Blockchains are deterministic, isolated environments — smart contracts cannot natively access external data. Oracles bridge this gap by fetching off-chain data (asset prices, interest rates, sports results, weather) and delivering it on-chain in a trustworthy way.
Chainlink is the dominant decentralised oracle network, aggregating data from multiple sources and using cryptoeconomic incentives to ensure accuracy. Pyth Network offers low-latency price feeds optimised for high-frequency DeFi. Individual protocols like Uniswap provide on-chain TWAPs (time-weighted average prices) as a manipulation-resistant alternative.
Oracle manipulation is a major DeFi attack vector: if an attacker can distort the price feed a lending protocol relies on, they can borrow against inflated collateral or trigger incorrect liquidations. Flash loans are often used to move spot prices momentarily for this purpose.