Decentralized oracles or decentralized oracle networks (DONs) allow real-world data transfer into a blockchain network. The distributed and siloed nature of blockchain technology makes it impossible to access legacy data sets and real-world data by itself. A decentralized oracle uses hybrid smart contracts to transmit off-chain data into the blockchain so that decentralized applications or dApps can interact with conventional applications and systems.
Blockchain oracles supply a host of real-world data to dApps across DeFi, gaming, and other sectors in an accurate and tamper-proof manner. The data is delivered via smart contracts without compromising the security of blockchain systems.
Examples of blockchain oracle projects include Chainlink, Band Protocol, and API3.