Blockchains and smart contracts are self-contained closed systems that can't access data external to their network. However, many contractual agreements require off-chain data to facilitate their execution.
So, how do these self-contained systems access off-chain data? The answer is Oracles.
Oracles can retrieve data from various sources, including APIs, websites, and sensors, and then provide this data to the smart contract to trigger the appropriate actions. This allows for more complex and dynamic smart contracts that can interact with real-world events and information.
Without oracles, smart contracts would have minimal use, and DeFi would not be where it is today.
Watch the video to learn more about Oracles and the various types.
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