Terra Classic doesn't rely on outside oracles; it votes on its prices

How the Oracle Vote Works

Services like Chainlink aggregate price data from many sources through a decentralized set of independent node operators, and most blockchains rely on them for exactly that. Terra Classic takes a different approach: it puts that responsibility directly on its validators.

The Terra network relies on validators to periodically vote on the current Luna exchange rate, with the protocol updating the on-chain rate as the weighted median of the ballot. This means larger validators, those with more stake behind them, carry more weight in determining the final price.

During each voting period, the oracle module requires all members of the validator set to submit a vote for the Luna exchange rate. Validators must first pre-commit to an exchange rate, then in the subsequent period submit and reveal their rate alongside proof of that pre-commitment. This scheme forces the voter to commit to a submission before knowing the votes of others, reducing centralization and free-rider risk.

Because this process occurs every 30 seconds, validators must set up an automated process to avoid getting slashed and jailed.

Penalties for Missing Votes

The system is backed by strict enforcement. When a validator misses votes or fails to vote correctly in the oracle process, other validators can submit evidence of the misbehavior. Once confirmed, the offending validator will have a portion of their funds slashed and may be jailed or excluded from consensus for a period of time.

Validators who land close to the weighted median share in the oracle reward pool. Those that participate faithfully and vote within the reward band around the weighted median earn a portion of seigniorage as an incentive to stay active and accurate.

The participation data reflects how seriously the validator set takes this obligation. According to validator.info data, 86 of 87 active validators voted in the latest round, a near-perfect participation rate that underscores the financial incentive to stay compliant.

Sources:
Terra Classic Protocol Docs - Terra Classic Documentation
Set Up an Oracle Feeder - Terra Classic Documentation
Chainlink Price Feeds - Chainlink Official Documentation