What’s an Oracle
An Oracle is basically an off blockchain source of reliable data, that an on blockchain smart contract needs to perform its function or functions accurately and effectively.
Why do the smart contracts on the blockchain need this data?
Smart contracts need information about price and other characteristics of equities, tokens and other stores of value to properly perform transactions between two parties. Smart Contracts are primarily disintermediators as in they eliminate the need for trusted intermediatirs, who are often referred to as middlemen or middlepersons. One of the functions of intermediators is to insure authenticity and value of items being traded. When intermediators were human they could do that, but smart contracts aren’t human and are incapable of performing this function currently, thus the need for a trusted third party to rely on for insuring authenticity and value, and to supply the data proving this authenticity or value to the smart contract.
How are oracles paid?
Oracles are usually dAPPs and have their own reward token, which is used to reward people who run computers or “nodes” which are off blockchain, who transmit data to nodes on blockchain, who the provide this data to onchain smart contracts. They reward “node” operators with dAPP tokens.
What token projects involve oracles?
The largest and most famous is Chainlink, others include Band, Tellor and DIA. You can read more about specific projects only. They are growing in business volume and their tokens are appreciating in value.