Blockchain
By Steven Anderson
1 / 14
While Chainlink price feeds are commonly used for getting the latest asset prices, you can also use Chainlink oracles to build dApps that fetch reliable historical price data.
2 / 14
Latest asset prices and historical price data are important in the asset pricing process, particularly for price discovery.
3 / 14
Asset pricing has been decided based on different models of prediction for different situations.
4 / 14
There have been many models developed for different situations – all of these pricing models evolve from these two principles.
5 / 14
When making an investment decision, we need a body of knowledge in the decision making process.
6 / 14
In General Equilibrium Theory, price is decided by market pricing and by supply and demand.
7 / 14
In Rational pricing the derivative pricing is calculated in such a way that they are arbitrage free. This approach creates a unique price risk for each asset.
8 / 14
Also, "in the absence of arbitrage, the market imposes a probability distribution, called a risk-neutral or equilibrium measure, on the set of possible market scenarios, and this…
9 / 14
Every investor is looking to work in a risk neutral manner. So, they keep observing the prices to make their decisions. Some follow pricing models.
10 / 14
Also, Chainlink’s decentralized oracle networks are critical infrastructure which augment DeFi smart contracts by connecting them to secure and reliable real-world market data.
11 / 14
People are in and out of DeFi Liquidity Pools for short and long time period, for which accuracy is crucial.
12 / 14
Meanwhile, Request Network are using Chainlink Price Feeds to enable “crypto payment for fiat-denominated invoices.
13 / 14
Crypto payment for fiat-denominated invoices is a breakthrough because with crypto being highly volatile, merchants are concerned about the exact pricing for the different cryptos.
14 / 14
ChainLink Oracle accuracy makes it possible to have high-quality price references for forex-based AMM.
The Currency Analytics
Want the full story?