Agave Integrates Chainlink Price Feeds to Help Secure Its Decentralized Money Market Protocol
We’re very excited to announce that Agave, a decentralized, non-custodial money market and lending protocol, has integrated Chainlink Price Feedson the xDai network. By integrating the industry-leading decentralized oracle network, Agave has access to high-quality, tamper-proof price feeds needed to obtain a secure and reliable source of financial market data.
Our initial integration involves the use of the following Chainlink Price Feeds: USDC/USD, DAI/USD, WBTC/USD, and WETH/USD, with plans to add more feeds as new lending markets are launched. By providing price data that encompasses multiple layers of decentralization, Chainlink Price Feeds help ensure that lenders’ funds won’t become uncollateralized and borrowers aren’t liquidated without good reason. Ultimately, this helps protect against the primary risk in any blockchain-based lending protocol, as price data feeds have historically been a large attack vector to target DeFi platforms.
We chose Chainlink as our go-to oracle solution because its infrastructure is seamless to integrate and time-tested in production. Chainlink already helps secure leading DeFi protocols responsible for tens of billions of dollars in smart contract value, maintaining robust security and high availability even amidst unexpected events such as exchange downtime, flash crashes, and data manipulation attacks via flash loans.
Leveraging Chainlink Price Feeds for Agave Lending
Agave’s users can interact with the protocol by depositing liquidity (lending) or by providing collateral and taking out loans (borrowing). By interacting with Agave, liquidity providers can earn rewards in the form of interest on their deposited funds and borrowers can borrow funds in an overcollateralized (i.e., perpetually) or an undercollateralized/one-block liquidity fashion (i.e., flash loans).
In order to help secure our decentralized lending platform, we needed access to fresh asset prices that are supplied directly on-chain in a highly reliable manner. Fair market asset prices should reflect a volume-weighted average from all trading environments. Thus, we needed to make use of an oracle to fetch aggregated price data off-chain and deliver it on-chain to be consumed by our application.
Some of the major benefits of using Chainlink Price Feeds in Agave include:
- High-Quality Data — Chainlink Price Feeds source data from numerous premium data aggregators, leading to price data that’s aggregated from hundreds of exchanges, weighted by volume, and cleaned of outliers and wash trading. Chainlink’s data aggregation model generates more precise global market prices that are inherently resistant to inaccuracies or manipulation of any single or small set of exchanges.
- Secure Node Operators — Chainlink Price Feeds are secured by independent, security-reviewed, and Sybil-resistant oracle nodes run by leading blockchain DevOps teams, data providers, and traditional enterprises. Chainlink nodes have a strong track record of reliability, even during high gas prices and infrastructure outages.
- Decentralized Network — Chainlink Price Feeds are decentralized at the data source, oracle node, and oracle network levels, generating strong protections against downtime and tampering by either the data provider or oracle network.
- Transparency — Chainlink provides a robust reputation framework and set of on-chain monitoring tools that allow users to independently verify the historical performance of node operators and oracle networks, as well as check the real-time prices being offered.
In the future, Agave will be looking to use Chainlink Price Feed oracles as a secure base for adding more complex collateral types, such as LP tokens.
“Because we were starting with a codebase that used Chainlink feeds already and we knew how seamless they are to integrate, we decided to use Chainlink Price Feeds as the base for our price oracle solution as well. It was great to have that particular concern out of the way from the get-go, as a robust price data source is crucial for our protocol to function properly and in a secure manner.” [Agave DAO seeds]
Chainlink is the industry standard for building, accessing, and selling oracle services needed to power hybrid smart contracts on any blockchain. Chainlink oracle networks provide smart contracts with a way to reliably connect to any external API and leverage secure off-chain computations for enabling feature-rich applications. Chainlink currently secures tens of billions of dollars across DeFi, insurance, gaming, and other major industries, and offers global enterprises and leading data providers a universal gateway to all blockchains.
Agave DAO is a decentralized non-custodial money market protocol where users can participate by borrowing or lending money through the application. The native token is Agave (ticker $AGVE).
The three main pillars of utility for the Agave token are Governance of the protocol, Rewarding contributors for their work, and Security of the lending protocol.
Holding Agave means holding a share of the DAO; with it any holder can shape the direction of the platform and community by creating, voting, or disputing on proposals.
Smart governance alongside a strong community are the main reasons to be part of the Agave ecosystem, which should lead to an increase in demand for the token and the lending platform.