Price Feeds
Price feeds are the data streams that provide real-time valuation of assets to smart contracts. They are the essential link between the outside world and the on-chain logic of derivative protocols.
Without accurate price feeds, a protocol cannot calculate margin requirements, trigger liquidations, or price options correctly. Because blockchain networks cannot natively access the internet, they rely on oracles to push this information on-chain.
The quality and reliability of these feeds determine the safety of the entire system. If a price feed is compromised or lags behind the actual market, the protocol can become insolvent or allow traders to profit from stale data.
Modern protocols use redundant, decentralized sources to ensure that price feeds are robust against tampering and downtime. They are the pulse of decentralized finance.