—TechRound does not recommend or endorse any financial, investment, trading, crypto or other advice or practices. All articles are purely informational—
Blockchain technology has transformed finance, automation, and AI-driven systems, but one major weakness threatens its growth: the Oracle Problem. As decentralised finance expands, the global market for blockchain based financial services is projected to exceed $200 billion by 2030. AI powered trading, lending, and asset management platforms now process billions of dollars daily, relying on real world data to execute automated transactions.
But there’s a problem. Blockchains can’t access external information on their own. They depend on oracles to fetch stock prices, crypto rates, sports results, and economic indicators. And if these oracles are compromised, the entire system collapses.
What Is the Oracle Problem? Why Does It Matter Now?
Smart contracts are self-executing agreements running on blockchain networks. They eliminate intermediaries, allowing instant transactions without banks, brokers, or centralised control. However, they have a fundamental limitation. Smart contracts are “blind.” As we mentioned, they cannot access external data on their own. To bridge this gap, they rely on oracles, services that fetch real-world data and feed it to the blockchain.
The problem arises when oracles are centralised. Most blockchain applications today still depend on a single provider for critical data, which introduces significant risks for DeFi protocols, AI-driven automation, and any application relying on automated execution.
Centralised oracles can be hacked, allowing attackers to inject false data that manipulates financial markets and causes devastating losses. They also undermine the very foundation of blockchain by reintroducing a single point of control, which contradicts the trustless and decentralised nature of smart contracts. If an oracle fails, whether due to a technical issue, manipulation, or downtime, entire DeFi platforms can go offline, resulting in disruptions, incorrect liquidations, and severe financial instability.
This exact problem led Morpher to develop its own next-generation, multi-sourced oracle, a solution designed to support real time financial applications without relying on a single point of failure. As a zero-commission trading platform, Morpher needed accurate, trustless market data to function smoothly.
But existing oracles simply weren’t fast or reliable enough to support real time trading. Instead of compromising on security or decentralisation, the team built an oracle that aggregates data from multiple sources, verifies accuracy, and ensures uninterrupted access to market prices.
By eliminating reliance on a single data provider, this type of oracles remove the risks of manipulation, downtime, and centralisation, offering a more secure, transparent alternative for DeFi applications and AI-driven financial models. Now, this technology is being made available to other blockchain projects, providing a critical piece of infrastructure for decentralised finance.
The Solution: Decentralised, Trustless Oracles
The only way to fix the Oracle Problem is to remove its biggest flaw: centralised control. That’s where decentralised, trustless oracles come in. Instead of relying on a single provider that can be hacked, manipulated, or fail, these oracles pull data from multiple independent sources, ensuring accuracy, security, and transparency.
Unlike centralised oracles, which act as a single point of truth, decentralised oracles cross-verify information before sending it to the blockchain. If one data source reports an incorrect price, it won’t affect the final result because other sources will correct it. This prevents manipulation, misinformation, and price distortions, the key risks in financial markets.
Another major advantage is real-time accuracy. Decentralised oracles constantly update and validate data, meaning smart contracts always have the latest market prices. Whether it’s a DeFi trade, an automated AI-driven transaction, or a prediction market payout, the data remains reliable, fast, and resistant to tampering.
By eliminating single points of failure, decentralised oracles make blockchain more secure, more efficient, and truly trustless.
Case Study: Centralised vs Decentralised Oracles in Action
Imagine a trading platform that displays Bitcoin’s price. Traders rely on this price to make buying and selling decisions.
With a Centralised Oracle:
- The platform uses a single price feed
- If that feed fails, lags, or is manipulated, the displayed price is incorrect
- A hacker falsely drops Bitcoin’s price from $100,000 to $60,000, triggering panic selling
- Traders lose significant money, and the platform’s reputation suffers
With a Decentralised, Trustless Oracle:
- The platform pulls prices from multiple sources and verifies them
- Even if one source fails or provides bad data, others ensure the correct price
- No false crashes, no manipulation, no downtime
- Traders can buy and sell with confidence
A centralised oracle introduces risk, while a decentralised oracle ensures reliability and fairness.
Without a reliable way to bring real world data onto the blockchain, smart contracts remain vulnerable, centralised points of failure persist, and the promise of decentralisation remains incomplete. This doesn’t just create technical limitations; it also delays the wider adoption of blockchain technology globally. Questions about blockchain’s reliability, susceptibility to manipulation, and speculative nature have already slowed mainstream acceptance, reinforcing skepticism about its long term viability.
Now, however, there is real hope for change. Decentralised, trustless oracles are fixing this issue at its core. By removing reliance on a single data provider and ensuring accuracy through multiple independent sources, they make DeFi platforms more secure, trading systems more reliable, and AI powered finance more resilient. The industry is already moving toward trustless, multi-source data solutions, bringing greater security, transparency, and efficiency to blockchain applications.
The question is no longer if decentralised oracles will become the standard, it’s how fast the industry will adopt them. For blockchain to truly reach its full potential, trustless oracles aren’t just an improvement. They’re a necessity.
—TechRound does not recommend or endorse any financial, investment, trading, crypto or other advice or practices. All articles are purely informational—
