Smart contracts are inherently limited to accessing information that already resides on the blockchain. Because this isolated environment places most practical, everyday applications out of reach, a specialized bridge is required to connect them to the outside world. This tool is known as an oracle, and its primary purpose is to feed external data into the blockchain network so that smart contracts can put it to work.

The architecture of an oracle holds the exact same level of importance as the smart contracts relying on its feeds. As long as an oracle supplies reliable and readily accessible information, the connected applications function effectively and deliver true value. However, if that data becomes flawed or unavailable, any system depending on it faces severe vulnerabilities.