Oracles on Bitsy Wiki

Oracle Node

Mon, 01 Jan 0001 00:00:00 +0000

An oracle node is a piece of software that feeds external data into a blockchain. Smart contracts can only read on-chain state — they have no way to make HTTP requests, query databases, or observe the physical world. Oracles bridge that gap.

Without oracles, a lending protocol cannot know the price of collateral, an insurance contract cannot verify whether a flight was delayed, and a prediction market cannot settle bets.

The oracle problem#

A blockchain’s security model assumes that all participants can independently verify every state transition. External data breaks this assumption — there is no way to trustlessly prove that ETH is trading at $1,800 on Coinbase. Someone has to attest to it.

Staked Consensus Oracle

Mon, 01 Jan 0001 00:00:00 +0000

A staked consensus oracle is a design for decentralized data feeds in which oracle node operators lock up tokens as collateral and a consensus mechanism among stakers determines the value reported to a smart contract. Operators who report honestly earn rewards; operators who deviate from consensus are slashed – their staked collateral is partially or fully seized.

The core idea borrows from proof-of-stake consensus on blockchains: economic skin in the game aligns incentives without requiring a trusted third party.

Oracle-Free Pricing

Mon, 01 Jan 0001 00:00:00 +0000

Oracle-free pricing means a contract derives the price of an asset entirely from on-chain liquidity geometry — the shape and position of an AMM position — rather than reading an external price feed. There is no number to fetch and trust; the position is the price.

What an oracle costs#

A price oracle imports an external fact onto the chain: “ETH is worth 3,000 USDC.” Anything that depends on that import inherits its failure modes:

Decentralized Keeper

Mon, 01 Jan 0001 00:00:00 +0000

A decentralized keeper is an autonomous agent – or a network of such agents – that monitors on-chain conditions and executes smart contract functions when those conditions are met. Keepers handle the “cron jobs” of DeFi: liquidations, oracle price updates, reward harvesting, limit-order execution, and any other task that a contract cannot trigger by itself because the EVM has no built-in scheduler.

Why Keepers Exist#

Smart contracts on Ethereum and other chains are reactive – they run only when an external account submits a transaction. Many protocol-critical actions (liquidating an under-collateralized loan, settling an expired option, compounding yield-farming rewards) must happen promptly, yet the contract cannot call itself. Keepers bridge this gap by watching for trigger conditions off-chain and submitting the necessary transaction when the time comes.