DFX Finance Integrates Chainlink Price Feeds to Secure Forex-Based Automated Market Maker
We’re excited to announce that DFX Finance — an automated market maker focused on providing a forex-based DEX leveraging stablecoins — has integrated Chainlink Price Feeds on the Ethereum mainnet. By integrating Chainlink’s industry-leading decentralized oracle network, DFX Finance has access to high-quality, tamper-proof price feeds needed to provide up to date FX prices to enable the most efficient AMM for Forex swapping. This will provide our users with strong assurances that they are getting the best prices and liquidity providers are maximizing capital at the most effective market prices.
Our initial integration involves the use of the following Chainlink Price Feeds: CAD/USD, EUR/USD and SGD/USD. We chose Chainlink as our go-to oracle solution because its infrastructure is seamless to integrate and time-tested in production. Chainlink already secures leading DeFi protocols responsible for 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.
The DFX AMM is designed specifically for forex and is not a generalized AMM. This new AMM is uniquely built for low volatility trading of currency pairs. We are working with stablecoin issuers in various countries covering multiple continents to provide access to domestic markets with local on/off-ramps. We leverage an oracle powered by Chainlink to provide external FX price feeds into the pricing engine.
The oracle design is very powerful. The oracle does not dictate the price, but rather provides a reference point for the bonding curve. This optimally shifts capital along the range of the bonding curve without any user intervention.
In order to secure our automated market maker, 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, so we need to make use of an oracle to fetch aggregated price data off-chain and deliver it on-chain to be consumed by our application.
After reviewing various oracle solutions, we integrated Chainlink Price Feeds because they provide a multitude of critical features such as:
- High-Quality Data — Chainlink Price Feeds source data from numerous premium data aggregators, ensuring broad market coverage through 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 accurate 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.
- Reputation System — Chainlink provides a robust reputation framework and set of on-chain monitoring tools that allow users to independently verify the historical and real-time performance of node operators and oracle networks.
“Chainlink provides an easy to use and high quality oracle that has proven it’s resilience through volatile crypto markets. We have confidence it will be a strong integration for the forex market.” — Kevin Zhang, Co-founder of DFX Finance
Chainlink is the most widely used and secure way to power universally connected smart contracts. With Chainlink, developers can connect any blockchain with high-quality data sources from other blockchains as well as real-world data. Managed by a global, decentralized community of hundreds of thousands of people, Chainlink is introducing a fairer model for contracts. Its network currently secures billions of dollars in value for smart contracts across the decentralized finance (DeFi), insurance, and gaming ecosystems, among others.
Chainlink is trusted by hundreds of organizations to deliver definitive truth via secure, reliable data feeds. To learn more, visit chain.link, subscribe to the Chainlink newsletter, and follow @chainlink on Twitter.
About DFX Finance
DFX is a decentralized exchange protocol (like Uniswap) with a dynamically tuned bonding curve optimized for foreign stablecoins (like USDC, CADC, EURS, XSGD, etc) using real-world FX price feeds.