Oracles explained in three sentences:
Smart contracts cannot directly read off-chain data, such as prices or weather; they rely on oracles to write that data on-chain.
If an oracle is manipulated, protocols that use its prices may liquidate positions at the wrong price, so it is crucial to diversify data sources and oracle nodes.
When prices rise or fall sharply, oracle prices may differ slightly from exchange order books, so leave plenty of buffer in lending positions.
$LINK 11.185 (+0.57%)
Smart contracts cannot directly read off-chain data, such as prices or weather; they rely on oracles to write that data on-chain.
If an oracle is manipulated, protocols that use its prices may liquidate positions at the wrong price, so it is crucial to diversify data sources and oracle nodes.
When prices rise or fall sharply, oracle prices may differ slightly from exchange order books, so leave plenty of buffer in lending positions.
$LINK 11.185 (+0.57%)