While blockchains lack direct access to off-chain data, web3 projects have devised their own means of sourcing such data for their smart contracts.
Nevertheless, relying on centralized points of on-chain data entry exposes projects to risks like manipulation, attacks, and censorship. Hence, a truly decentralized oracle is of paramount importance in web3 infrastructure.
For an oracle to be truly decentralized, it must ensure that data provided by anonymous reporters is protected and validated through an unrestricted, distributed network. Furthermore, it should incorporate simple crypto-economic incentives to enable anyone to contribute any type of data, which can then be verified by everyone.