What is an oracle?

In the ancient world, oracles were people who delivered messages and knowledge from the gods to the mortals.

In the blockchain world, an oracle is a technical component that delivers information about the real-world to on-chain smart contracts.

For example,

• a change in the Bitcoin to ADA price may trigger a limit order in a DeFi contract,
• the final score in a soccer match may trigger a payout in a betting contract,
• or an extreme weather event may trigger a crop insurance contract.

The real-world data published by an oracle must be trustworthy as it has significant financial consequences for on-chain events.

Chainlink is currently the most well-known oracle solution and was built for the Ethereum blockchain. Charli3 is the first Cardano native oracle.