// GLOSSARY -- DEFI

What is Oracle Feed?

1 min read Updated

An oracle feed is a continuous stream of real-world data delivered to blockchain smart contracts — most commonly price data for financial assets, updated at regular intervals or on significant price changes.

WHY IT MATTERS

Oracle feeds are the price infrastructure of DeFi. Chainlink's ETH/USD feed, for example, provides a constantly updated price that hundreds of protocols rely on for liquidations, settlements, and valuations.

Feeds update through two mechanisms: heartbeat (periodic update regardless of price change, e.g., every hour) and deviation threshold (update when price moves more than X%, e.g., 0.5%). This balances freshness against gas costs.

Feed reliability is critical — a stale or manipulated feed can cause millions in incorrect liquidations. Multi-oracle setups and circuit breakers provide additional safety.

FREQUENTLY ASKED QUESTIONS

How often do oracle feeds update?
Varies by feed and chain. High-priority feeds (ETH/USD): every heartbeat (~1 hour) or on 0.5% deviation. L2 feeds update more frequently due to lower gas costs. Check feed-specific documentation.
What happens if an oracle feed fails?
Depends on the protocol. Well-designed protocols have fallback oracles, circuit breakers (pause operations if feed is stale), and multi-oracle aggregation.
Can oracle feeds be manipulated?
Direct Chainlink manipulation is extremely difficult (decentralized network). But protocols using thin-liquidity DEX prices as oracles are vulnerable to flash loan manipulation.

FURTHER READING

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