👁 What are oracles?

⚫️ Yesterday, we published a post mentioning oracles, but we haven’t yet explained what they actually are. For those unfamiliar with this concept in the crypto world, here’s a new edition of our #howtoton series.

⚫️ Many TON-based projects can function solely with the information available on the blockchain. However, sometimes smart contracts require data from the “outside world.” For example, imagine a service that allows users to bet on the outcome of a football match. Once the match is over, how can a smart contract “know” the result in order to distribute rewards to the winners?

⚫️ This is where oracles come into play. These services bring external data “inside” the blockchain. They’re called “oracles” because their information can be seen as “magical knowledge” that a smart contract cannot obtain on its own.

⚫️ Some companies offer access to various types of data via oracles—for example, asset prices. Thanks to this, services like Storm Trade on TON enable users to “short” and “long” currencies, stocks, and even oil, since price data for these assets can be easily retrieved.

⚫️ In most cases, oracle-provided data is accurate, but in theory, an oracle could be manipulated. This creates a need to trust a third party. While this trust is unavoidable in some cases, there are situations where external data can be obtained without oracles, leading developers to avoid them in order to eliminate a potential risk point.

⚫️ This is particularly relevant for sidechains, which require information to be exchanged between different blockchain networks. The easiest way to do this is through oracles. However, automated trustless solutions—where no human intervention is possible—are considered more secure. This is why participants in a recent competition were encouraged to develop such solutions.

💡 A similar example is the TON Teleport project, which facilitates interaction between TON and Bitcoin. Since it involves exchanging information between the two networks, it would typically rely on oracles. However, its key feature is that it is also “trustless”—designed in a way that eliminates the need to trust oracles altogether.

@thedailyton