Chainlink expands price reference data for Ethereum DeFi

  • The DeFi ecosystem now has access to the largest collection of price market data of open financial products on the Ethereum blockchain.
  • Chainlink provides on-chain oracles that enable Ethereum dApps to directly access reliable price reference data.

In decentralized financial economics, the fundamental problem is that dApps can basically only work with on-chain data. Chainlink describes that currently, however, more than 90% of deFi applications require a constant connection to off-chain data to function in a trusted, robust and economically sustainable manner.

The “Chainlink Price Reference Data” has been live on Mainnet since yesterday, providing access to live data from leading DeFi products from many different financial markets. This new interface expands the amount of secure and reliable data that Ethereum dApps can access and is expected to drive the introduction of new DeFi products.

DeFi requires constant access to real-time market data, especially prices, in order to reliably execute the logic underlying the applications. For example, the protocols for money (Ampleforth), derivatives (Synthetix), lending (Aave) and decentralized exchange (Loopring) need to know the price of certain assets before they can execute a centralized on-chain function.

Chainlinks oracles offer numerous advantages:

Chainlink’s decentralized oracle networks are composed of security-reviewed, Sybil-resistant, and fully independent nodes. These nodes are run by leading blockchain DevOps and security teams, many of which have extensive experience running POS nodes that secure millions of dollars in value across multiple blockchain networks.

At any point when a request for an on-chain price update is made, each node in the network is tasked with retrieving and transmitting the current price. The responses are then aggregated off-chain and delivered in the chain as a single price update. Chainlink further describes that by incorporating decentralization at the node level, high availability is ensured for all chain-driven price reference data:

They also maintain data quality via redundancy, by having each node retrieve the price from an API such as CoinMarketCap, CoinGecko, etc., which aggregates data from many sources.

The new resource provides easy access to all of Chainlink’s oracles in one interface. This makes it possible to access a wide range of information about Chainlink’s infrastructure, providing current or historical data across the distributed Oracle networks.

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Chainlink on the rise

Recently, Chainlink has entered into a collaboration with ICON. The goal of the cooperation is to enable real data to be imported beyond the blockchain (off-chain) into ICON’s public blockchain, while maintaining the decentralized consensus.

Furthermore, Chainlink was also able to convince Alkemi to use the decentralized oracles. Alkemi is an open source Ethereum-based financial platform for prime brokerage, which will integrate Chainlink’s Oracle technology. Alkemi hopes to be able to output up-to-date and highly accurate crypto-asset price data on the platform. Alkemi says:

Chainlink’s protocol is facilitating trusted marketplaces for obtaining quality oracles, which is quickly becoming the de-facto standard in the Oracle-as-a-Service category. Chainlink has already seen wide adoption across the blockchain landscape including an array of open finance projects as well as large enterprises such as Google.

Many large companies recognise the potential of Chainlink and are piloting the use of decentralised oracles. However, it remains to be seen whether this service can establish itself as an industry standard.

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About Author

Collin is a Bitcoin investor of the early hour and a long-time trader in the crypto and forex market. He's fascinated by the complex possibilities of blockchain technology and tries to make matter accessible to everyone. His reports focus on developments about the technology for different cryptocurrencies.

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