Lien to Integrate with Chainlink and Use Its ETH/USD DeFi Oracle
We are pleased to announce that we will be integrating with Chainlink, the market-leading decentralized oracle network, to leverage its ETH/USD DeFi price oracle within the Lien protocol.
The Lien protocol is a system for crypto derivatives that can operate autonomously without the need for an artificial governance mode. As stated in the white paper, we need a reliable oracle in order for the Lien protocol to function. For this reason, we have been investigating several oracles to determine which would be the best fit for the Lien protocol. After extensive research, we concluded that Chainlink was the only oracle solution capable of satisfying our oracle requirements.
There are several reasons for using Chainlink as an oracle within the Lien protocol, including:
- Stable operation
- Frequent and accurate price updates
- Establishment of a permanent operating system that allows the same contract address to be used even when there is an update on the Chainlink platform.
In particular, the third reason is the most important in our effort to provide a protocol that can continue to operate in a reliable and autonomous fashion, something which Chainlink greatly helps us achieve. Indeed, we believe that the immutable nature of the contract address on Chainlink is valuable not only to our protocol but also to other DeFi projects which are looking for solutions for their stable implementations.
The Lien protocol will specifically integrate with Chainlink’s ETH/USD Price Reference Contract, which is secured by a collection of 21 independent nodes that collectively source data from at least seven different high-quality data aggregators. Price updates occur every .5% deviation in price, while also having regular time-based updates every two hours. The Lien protocol leverages the Chainlink ETH/USD oracle for the following three purposes;
1. Calculating the settlement prices of SBT and LBT
Lien returns ETH on the maturity date for SBT and/or LBT, whose prices are determined based on the ETH/USD price on the contract maturity date. As such, it is extremely important that the price is accurate. The protocol references to the price information provided by the Chainlink oracle when calculating the amount of ETH to be returned upon maturity.
2. Confirming the eligibility of collateral when minting iDOL or in emergency auctions
Lien confirms the eligibility of SBTs deposited when iDOL is issued. Here, the protocol needs to be able to reference the ETH/USD price frequently.
3. Deriving spreads for Lien FairSwap
Spreads observed on the Lien FairSwap platform will fluctuate according to the volatility of the ETH/USD market. Chainlink will provide relevant information, which the Lien protocol will then use to calculate the volatility. This is done on a rather frequent basis.
We can confirm that we are able to successfully calculate volatility by using Chainlink’s ETH/USD oracle. We believe that the ability to integrate volatility into a smart contract is a big step forward in the development of the overall DeFi space. As we approach the mainnet launch of the protocol, we will keep you updated on important protocol updates going forward. Stay tuned!
Lien is a self-regulating protocol that allows for issuing stable coins and leveraged tokens in a whole new way. You can use the protocol to create your own unique derivative contracts and take advantage of the price development of ETH in an efficient manner. The protocol will also help you hedge against the risks associated with the price volatility in ETH by providing a way to issue stable coins backed by a basket of highly stable derivative tokens.
The protocol is designed to work without a governance mechanism, eliminating various complications that result from human intervention and allowing for greater efficiency with which to manage your crypto assets within the protocol. The Lien project was launched by a group of anonymous developers who are passionate believers of the future that cryptocurrency brings.
If you’re a developer and want to connect your smart contract to existing data and infrastructure outside the underlying blockchain, reach out here. We can help you quickly and securely launch your data-enabled application or Chainlink Price Reference Data Contract on mainnet today. You can also visit the developer documentation or join the technical discussion on Discord. Learn more by visiting the Chainlink website or follow us on Twitter or Reddit.
Chainlink is a decentralized oracle network that enables smart contracts to securely access off-chain data feeds, web APIs, and traditional bank payments. It is well known for providing highly secure and reliable oracles to large enterprises (Google, Oracle, and SWIFT) and leading smart contract development teams such as Polkadot/Substrate, Synthetix, Loopring, Aave, OpenLaw, Conflux, and many others.
Note: chainlinkecosystem.com does not claim any ownership of this content, all credit to Lien, view official announcement.