Off-chain data

A blockchain is deterministic: every node must reach the same state by executing the same thing. That is why a contract cannot, on its own, make a call to an external API, since the result would not be equally verifiable by all nodes. External data must be brought on-chain through a signed transaction, that is, an oracle. Common patterns are writing the data to the chain so contracts can consume it, using decentralized storage like IPFS or Arweave for bulky data while keeping only the hash on-chain, and data availability in the context of rollups.

It is the foundation of tokenized real-world assets (RWA) and of nearly all useful DeFi. Without reliable off-chain data there are no prices for collateral, no proof of reserves, no derivatives settlement and no tokenization of real assets. The quality and reliability of that data directly conditions the contract that consumes it. Typical categories include market prices, exchange rates, identity and KYC data, asset reserves and real-world events.

Chainlink Data Feeds brings aggregated off-chain prices on-chain, and Chainlink Proof of Reserve verifies off-chain the reserves backing stablecoins and tokenized assets. IPFS and Arweave store off-chain data anchored by its hash, and Celestia works as a data-availability layer for rollups.