ChainLink tweeted: “Bancor’s V2 is using Chainlink price oracles as a key component in creating automated market makers w/ pegged reserves. This dramatically reduces the risk of “impermanent loss,” resolving a critical issue in the adoption of algorithmic, autonomous liquidity.”
Automated market makers are algorithmic agents who do what it takes to maintain an open interest in electronic markets. They have been used successfully to create newer prediction markets as they also promote liquidity providing agents.
Pegged reserves refer to the currency value, which is maintained at par with the exchange rate of the currency it is pegged to.
Autonomous liquidity includes several factors like banknotes in circulation, government deposits with the central bank, net foreign assets of the central bank, and others.
MeetCasperLabs are integrating Chainlink as the core component of their architecture. Casper CTO MParlikar stated, “The Chainlink decentralized oracle network will enable us to represent transaction fees in currency versus tokens, making budgeting simple & efficient for businesses.”
Sydney Ifergan, the crypto expert, tweeted: “Oracles, market making and autonomous liquidity – Chainlink (LINK) are clear about the important facets of DeFi, and they are beginning to make their mark in there.”
One of the ChainLink enthusiasts talking about Sergey Nazarov tweeted: “It’s not often we get a tweet from Sergey, but when we do, you can bet it’s going to be based as hell.”
ChainLink is setting the highest Oracle Standards. Sergey Nazarov, in the past, did state that a faulty oracle will be behind the next big crypto Hack. The community opines that anyone with the right mind will not use faulty oracles. Developers realize that they need to be using the best zero fault tolerance system available.
Very recently, Sergey Nazarov tweeted: “Our reference price data networks have over 21 independent nodes which connect to over ten independent data aggregators. We don’t go directly to one exchange’s price, regardless of if it’s a DEX; that alone can create an attack that is difficult to mitigate if volumes drop.”
Further clarified tweeting: “DEXs are great and provide large benefits to users, but I do caution Defi smart contract developers from using any one on-chain or off-chain data source/exchange API to determine price, and recommend using high-quality data aggregators via decentralized oracles like @chainlink,”
ChainLink is an excellent protection against price manipulation on the liquid assets.
A finance graduate, Maheen Hernandez has been drawn to cryptocurrencies ever since Bitcoin first emerged in 2009. Nearly a decade later, Maheen is actively working to spread awareness about cryptocurrencies as well as their impact on the traditional currencies. Appreciate the work? Send a tip to: 0x75395Ea9a42d2742E8d0C798068DeF3590C5Faa5
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