# Oracle

## Blockchain Oracles

In the blockchain space, an "**oracle**" refers to a smart contract or entity that provides off-chain information to smart contracts on the blockchain. Despite being outstanding self executing tools, smart contracts typically lack the ability to access real-world data, such as the price of a commodity or asset, the outcome of a sporting event, or other external information.

For Vaults, the **XAU₮ Oracle** is a fundamental piece of the design, as it allows the smart contract to value the XAU₮ tokens provided as collateral by the user.

The **XAU₮ Oracle** used by Alloy by Tether Vaults can be found [**here**](https://etherscan.io/address/0x02C65719Da4317d84D808740920d6f6285045660), and communicates to the Vault the value of XAU₮ expressed in USD.