Oracles

Blockchain oracles serve as a link between the blockchain and other external data sources. In actuality, the blockchain is a closed system; as such, it is unable to pull data into or out of any external systems (off-chain data) and only has access to data that is already present within the original blockchain context. This creates a blockchain-oracle issue where the blockchain is unable to obtain data from actual occurrences. Smart contracts must, however, connect to a wide range of external data sources in order to fulfill a number of useful functions. As an illustration, a hybrid smart contract that uses oracles to give asset prices for finance, weather data for insurance, randomness for gaming, IoT sensors for supply chain management, etc.

The need for blockchains to access and connect to external data sources, legacy systems, and advanced computation brought about oracles. The benefits of oracles in the blockchain industry cannot be underestimated, and it is therefore crucial to do your research before choosing your oracles when creating hybrid smart contracts. Avoiding centralized oracles is therefore encouraged since leveraging decentralized oracles is important for developing your decentralized apps. On one hand, centralized oracles are controlled by a single entity and, as such, have a single point of failure, making smart contracts vulnerable to attacks. On the other hand, decentralized oracles are designed to fly above the limitations of centralized oracles by eliminating the single point of failure. A decentralized oracle comprises multiple participants in a peer-to-peer network that form consensus on off-chain data before sending it to a smart contract.

The following providers have integrated with Klaytn to deliver decentralized oracle services:

• Orakl Network

• Witnet

• SupraOracles

• KlayOracle