How it works
Because blockchains cannot independently know off-chain data, applications rely on oracle networks or trusted publishers to supply it.
What to check
Check how many data sources and operators are involved, how often prices update and what fallback mechanisms exist.
- Check source diversity
- Check update frequency
- Identify fallback rules
Limits and risks
A secure smart contract can still fail economically if its oracle is manipulated, stale or unavailable. Oracle design is therefore part of protocol risk.
Primary sources
Bitcoin Developer Reference↗Ethereum developer documentation↗FATF: Virtual Assets↗General information only. Investment products can lose value, and terms, fees and regulation can change.