- Binance and Chainlink have entered into a partnership to support the development of the Decentralized Finance (DeFi) ecosystem.
- Chainlink’s technology will enable Binance to share its market data with DeFi projects.
Binance and Chainlink (LINK) announced a partnership to support the growth of the Decentralized Finance (DeFi) market yesterday. As part of the partnership, Binance will share its data with other blockchain platforms. Chainlink has developed a new technology for this, which provides the link between the different blockchains.
DeFi is currently a huge trend in the crypt currency market. As CNF reported yesterday, the volume of Ether (ETH) bound in DeFi applications is about to reach an all-time high. In the past months, various DeFi applications have enjoyed a growing popularity.
Nevertheless, the trend is still in its initial phase and has great potential. DeFi protocols are based on blockchain-based smart contracts and enable the development of decentralized financial applications to develop new forms of financial instruments that are common in the traditional financial world, such as loans, derivatives and decentralized exchanges.
Binance seems to have identified this trend. According to the official press release, both companies will work together to drive DeFi’s growth. Changpeng Zhao, CEO of Binance, was enthusiastic about the partnership and explained:
At Binance, we are committed to growing the blockchain ecosystem. We support the development of Decentralized Finance as an important part of the ecosystem. Binance works with many blockchain projects, including Chainlink, to bring freedom of money everywhere, and through the help of Binance data and Chainlink’s network, we can help accelerate the growth of DeFi.
How does the partnership between Binance and Chainlink work?
Binance is one of the world’s largest exchanges in terms of (adjusted) trading volume and has an industry-leading Application Programming Interface (API) that covers 637 cryptocurrency pairs via websocket and Rest API. Binance aims to make this data available to the developers of Decentralized Finance applications that can develop these products, such as derivatives, futures, options or swaps for cryptocurrencies. Since this requires trustworthy data, Binance is playing a key role. Binance explained this in their statement:
Making these datasets available on public blockchains allows interoperability across centralized and decentralized worlds, whereas DeFi Dapps can greatly benefit from data produced by highly liquid centralized exchanges.
On the other hand, Chainlink provides the necessary technical basis. Chainlink’s Oracle technology will help DeFi projects securely access and integrate Binance’s data coming from outside the blockchain into their blockchain. For this purpose, Chainlink has developed an external adapter that allows smart contracts to access the Binance API and integrate the data into the DeFi project to enable connectivity.
The partnership also includes the development of an application that can automate transactions on Binance.
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The current LINK price
Despite the good news, the Chainlink (LINK) price is not very impressed. While Bitcoin and other altcoins recorded double-digit gains, the LINK price has only increased by around 2% in the past 24 hours. Nevertheless, LINK is among the biggest winners in this week (+19%) and this month (+60%).