Oracle
A service that feeds outside data, like asset prices, into smart contracts, which otherwise cannot see anything beyond their own blockchain.
Blockchains are sealed off. A smart contract cannot read a stock price or the weather on its own. Oracles bridge that gap, delivering external data on-chain so contracts can act on it. A lending protocol, for example, needs an oracle price to know when to liquidate a loan.
This is also a weak point. Feed a contract a wrong price and it will obey blindly. Attackers have exploited thin or manipulable price feeds to trigger bad liquidations and drain funds. Chainlink became the dominant oracle network by aggregating many sources to resist exactly this.
Related terms
Self-executing code on a blockchain that runs exactly as written when its conditions are met, with no party able to intervene.
DeFi (Decentralized Finance)Financial services run by code on public blockchains, letting people trade or borrow without a bank.
Lending ProtocolA DeFi platform where users deposit crypto to earn interest and others borrow against collateral, all managed by smart contracts.
Flash LoanAn uncollateralized loan that must be borrowed and repaid within a single blockchain transaction, or it never happens at all.