What Is Oracle?
An oracle in a blockchain is an entity that connects blockchains to external systems, allowing smart contracts to execute based upon inputs and outputs from the real world.
Oracles are third-party services that provide smart contracts with external information, while blockchain technology itself is defined as a ledger of decentralized data that is securely shared by select participants.
Oracles are security critical system, as they often report prices and if the price is wrong the underlying protocol may suffer what is called an oracle attack or a price manipulation attack. For example, if in a lending protocol the collateral price is wrong, the loands can be incorrectly liquidated.
Popular oracles protocols include
ChainLink (on EVM-Compatible blockchains)