Glossary
Oracle
Infrastructure that publishes off-chain data — prices, weather, sports results — onto a blockchain so smart contracts can consume it.
Smart contracts can only see on-chain state. An oracle is the service that brings external information on-chain by publishing it as a transaction that contracts can read.
Most DeFi protocols depend on price oracles to value collateral and trigger liquidations; manipulated or stale prices have caused some of the largest exploits in the space. Designs like Chainlink, Pyth, and UMA each trade off latency, cost, and the trust model required to believe the published value.