The Oraclos Chain is a weapon used by Aeron. It was given to him by Mavda. He must use it to collect the hearts of monsters for Elena to eat. Otherwise she will turn into a beast herself. The Oraclos Chain is a weapon of the Vestra tribe.
Mavda holds a ceremony in which she connects the chain to Elena by fusing it with some of Elena's hair. She does this so that Aeron will be connected to Elena while he is in the Towers. This is why you can see how close Elena is to transforming in the timer in the bottom right of the screen.
There are many different ways in which it can be used.
In battle, you can jerk an enemy back, drag one towards you, wrap one up in it; there are many ways to use this effectively with your main weapon. Effective strategies include throwing a wrapped enemy, tying an enemy to another and attacking it with your sword (which deals damage to both enemies), and attaching it to a non-moving object, restricting its movement. You can even swing one around or throw it.
The Chain has a limited amount of power, which determines the maximum time it can stay attached to a moving or struggling enemy. The bar at the bottom of the screen shows the Chain's power. When you grapple an enemy, the bar will fill a short way, but as the enemy struggles and moves around, the bar will drop down again. The chain will be released when the bar is no longer filled. You can fill the bar up by pulling away from whatever you have grappled. When it has reached the maximum limit of the bar, the bar will glow gold and the Chain will be stronger, doing more damage when pulled back hard.
The maximum power the chain can hold will be increased upon defeating each Master.
Outside of Battle
It isn't just used as a weapon, either. Aeron must use it to solve puzzles and do other things outside of battle. He can use it to swing on things like bars, pull himself up to higher places, as well as pull levers and do many other things like pick items that are far away.
Using B, you can zoom in and slow time while aiming the Oraclos Chain. Releasing B will fire the Chain at the targeted place.
When holding B, a red cursor will appear with four points of light moving inwards. When these converge, tapping A will launch the Chain out to strike the target. With proper timing, five of these Chain strikes can be done in a row.
Holding B and pressing A when a small object or enemy is grappled will throw the object at a desired location.
Shaking the Nunchuk with a small object or enemy grappled spins the target around Aeron; letting go with C throws the target. Targets that are thrown can break boxes or knock other enemies over.
When an enemy is grappled, pressing and holding C will cause the Chain's bar to fill as Aeron drags the enemy towards him. Pulling the control stick away from the grappled enemy (instead of using the C button) will also fill the Chain bar, but will cause Aeron to slowly back away from the enemy as he drags it.
Shaking the Wiimote with an enemy or object grappled will cause Aeron to yank the Chain out, dealing damage. The higher the Chain bar is filled, the more damage it will deal. This move can also be used to flip some switches.
Once an enemy is grappled, Aeron can use B once more to grapple with the other end of the chain. Grappling the same enemy immobilizes it, allowing for more attacks; grappling two enemies together will cause attacks on one to damage both; grappling the enemy to an immovable object prevents it from running away (a mechanic utilized in both the Treetop Tower and the Arcadian Tower).