Reflexer Integrating Chainlink Oracles to Help Power the Testnet RAI Reflex Bond
We are excited to announce that we have successfully integrated Chainlink as part of RAI’s testnet launch! Chainlink’s ETH/USD Price Reference Data oracle network will provide a reliable price feed for RAI, our first reflex bond (or otherwise known as a Generalized Ethereum Bond).
GEB is a framework for building reflex bonds — a new asset type meant to be used as low volatility and trust minimized collateral in other DeFi protocols. Reflex bonds dampen the volatility of their underlying assets with the use of an autonomous, on-chain feedback mechanism. This mechanism constantly changes the users’ borrowing power and incentivizes them to generate more bonds or, in other cases, close out their positions. Our whitepaper goes more in-depth into what makes reflex bonds tick.
RAI, a reflex bond collateralized solely by ETH, is our first asset deployed live on the Kovan testnet as part of our beta launch. It is designed to slow down ETH’s price moves and thus provide a more “stable” alternative to Ether as DeFi economic bandwidth. The motivation for building a dampened version of ETH is to offer DeFi users more time to exit their positions and thus avoid liquidation.
A critical component needed to make RAI work is a robust and reliable oracle that can provide three types of price feeds:
- Prices for all collateral types accepted into the system (in RAI’s case only ETH)
- Price data for RAI itself. The data will be used as input for RAI’s internal feedback mechanism. This mechanism will change the borrowing power of all currently opened CDPs
- Dara for the protocol token in order to automatically set a starting price for debt auctions
In order to cover our testnet ETH price feeds, we chose to integrate Chainlink’s ETH/USD Price Reference Data oracle network because it’s a ready-made solution that is already securing hundreds of millions of dollars in value across many leading DeFi applications. It provides several key features that make it a reliable price oracle including:
- End-to-end decentralization of both the oracle mechanism and the data sources, ensuring there are no single points of failure in the delivery or sourcing of price data
- High-quality data is retrieved from premium data aggregators, providing accurate volume-adjusted price feeds with market coverage across all trading environments
- A transparent visualization derived from on-chain data, allowing any user to monitor the current on-chain price, the update frequency, the reliability of each individual node supplying data, their responses, response transaction gas price and much more
We can use Chainlink’s Price Reference Data and leverage their large collection of existing node operators and modular external adapter technology to build customized decentralized oracle networks that connect to any API to support any collateral type desired.
In order to push the boundaries of decentralized oracle technology, we plan to use the protocol’s stability fees to pay for calls toward a wide variety of oracle networks. We’re looking to share our findings with the wider crypto community and we hope that other projects that are integrating with the Chainlink ETH/USD oracle (which utilizes a public good model for lowering costs since over ten other projects mutually support it) will benefit from them.
If you want to learn more about this exciting integration for our testnet launch, tune in to our Video AMA next week, join our Discord to stay up to date with the latest reflex bond developments and propose your ideas around decentralized oracles using our improvement proposal process.
If you’re a developer and want to quickly get your application connected to Chainlink Price Reference Data, visit their developer documentation and join the technical discussion in Discord. If you want to schedule a call to discuss the integration more in-depth, reach out to them here.
Note: chainlinkecosystem.com does not claim any ownership of this content, all credit to Reflexer Labs, view official announcement.