Oracles play a critical role in decentralized finance (DeFi) by providing external data to smart contracts on the blockchain. Oracles fetch and verify real-world data, such as asset prices, interest rates, or weather conditions, and feed this information into the DeFi ecosystem. This data helps smart contracts execute predefined conditions based on real-time information, enabling various DeFi applications such as decentralized exchanges, lending platforms, and prediction markets to function effectively and autonomously.
