An Oracle is a scheme that bridges between on-chain smart contracts and off-chain data. For example, weather data, stock and other financial data, etc.

In the context of decentralized finance, an oracle is a piece of software or a service that provides external data to a blockchain or other decentralized networks. Oracles are often used to bring real-world information, such as prices, weather data, or other types of data, into a decentralized network. This is useful for enabling smart contracts and other decentralized applications (DApps) to access and use external data in their operations.

Oracles are typically used in DeFi to provide real-time pricing data for assets such as cryptocurrencies, commodities, and stocks. This allows decentralized applications to use this data to execute trades, settle contracts, and perform other operations on the blockchain.

Oracles can also be used to provide other types of external data, such as weather data, to decentralized applications.

In summary, oracles are an important part of the decentralized finance ecosystem, providing external data to decentralized networks and enabling smart contracts and DApps to access and use this data in their operations.

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