Oracle Feed

An oracle feed is a service that provides external data to a smart contract, such as the current price of a cryptocurrency. Since blockchains cannot natively access off-chain data, oracles act as the bridge that feeds this information into the protocol.

For derivatives, the oracle feed is the source of truth for the spot index price, which determines the funding rate and liquidation triggers. The security and reliability of the oracle are paramount; if the oracle is compromised or provides stale data, the entire derivative protocol can fail.

Decentralized oracle networks are often used to aggregate data from multiple sources to prevent a single point of failure.