Oracle
A service that feeds a smart contract data from outside, such as an asset price. The blockchain itself cannot see anything beyond it. The oracle is the bridge, and the contract is only as reliable as that bridge.
Example
A DeFi loan is closed by force when the collateral drops below a threshold. The contract learns the collateral price from an oracle.
What not to do
Do not trust a protocol that takes its price from one weak source: such a price is easier to distort. Check how many sources the oracle uses.
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