First, how does a blockchain know the price of something off-chain?
Chainlink aggregates price quotes from multiple sources through a network of independent nodes, then writes them on-chain.
Prices are generally updated when the deviation reaches a set threshold or after a fixed interval.
When using DeFi products, check which price feed mechanism they use—the fewer the feed sources, the greater the risk.
$LINK is the token of the decentralized oracle Chainlink.