DeFi on Ethereum Classic: Chainlink gains next partner

  • Ethereum Classic will use Chainlink’s oracle technology to further increase compatibility with Ethereum.
  • Furthermore, Chainlink enables the developers of Ethereum Classic to enter the DeFi market securely.

Ethereum Classic Labs is the next high-level blockchain project that will use Chainlink’s oracle technology. In a blog post, Ethereum Classic Labs announced that it will work with Chainlink to provide distributed oracles for the Ethereum Classic (ETC) blockchain. The goal of the cooperation is to increase the compatibility of Ethereum Classic with Ethereum (ETH). On the other hand, Ethereum Classic Labs will strive to provide decentralized financial (DeFi) applications on the ETC blockchain.

The goal of compatibility has been issued by Ethereum Classic Labs for a long time and was recently evident with the recent hard forks that implemented the functionalities of previous ETH forks. Nevertheless, there is a big problem. Although Ethereum Classic is a hard fork of Ethereum, both blockchains are inherently unable to interact with each other. Chainlink can solve this problem by implementing the exchange of data via the oracle technology and will thus contribute significantly to increased compatibility, the blog post explains:

With the growth of ETC and ETC-ETH compatibility, supporting Chainlink use cases on ETH is important to our infrastructure.

Furthermore, the integration of Chainlink will create many new use cases, as James Wo, founder of ETC Labs, stated:

This extended functionality to off-chain environments substantially scales the number of use cases smart contract developers can create using Ethereum Classic and ultimately makes it easier and more seamless for developers to build on Ethereum Classic.

According to Ethereum Classic Labs, one such use case is the deployment of DeFi applications. The so-called “Price Reference Contract” provides a secure and reliable access to the ETH/US price. It consists of 21 independent Chainlink oracles, each of which submits a price that is aggregated and transmitted on-chain. This usage of aggregated data provides a robust canonical result that can be queried and used by users or DeFi projects.

Chainlink builds a bridge to the outside world for Ethereum Classic

Using the Chainlink oracles, developers are able to provide their smart contract applications with external data. Smart contracts are basically not very “smart”, as they can only work with the data stored on the blockchain (on-chain). In order to access data beyond the blockchain (off-chain), oracles are required. The current industry-leading technology for this are the oracles of Chainlink (LINK).

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They build a bridge between the blockchain and the outside world. Oracles enable off-chain connectivity for smart contracts by using external connection points (APIs). Chainlink can give smart contracts access to data providers, Web APIs, enterprise systems, cloud providers, IoT devices, payment systems and other blockchains.

Chainlink also offers a reliable oracle network that enables Ethereum Classic smart contracts to interact with off-chain resources with the same security guarantees as the underlying blockchain. Chainlink ensures decentralization of both the data source and the data retrieval process. Developers can decentralize the data source by retrieving data from multiple data providers.

Just a few days ago it was announced that another very well-known blockchain project will use Chainlink. Polkadot, the first non-Ethereum-based project and one of the most highly hyped projects from the ICO boom phase, had integrated the oracles of Chainlink in a first proof of concept in its web application framework Substrate. In the long term, Chainlink is to be integrated for the entire Polkadot network.

Chainlink’s price is still on the upswing and has recorded the largest gainin the top 20 (+7.2%) within the last 24 hours. Ethereum Classic is trending sideways (-0.1 %) at the time of writing.

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About Author

Jake Simmons has been a crypto enthusiast since 2016, and since hearing about Bitcoin and blockchain technology, he's been involved with the subject every day. Beyond cryptocurrencies, Jake studied computer science and worked for 2 years for a startup in the blockchain sector. At CNF he is responsible for technical issues. His goal is to make the world aware of cryptocurrencies in a simple and understandable way.

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