Dollar Protocol Integrates the Chainlink CNY-USD Decentralized Price Oracle
Dollar Protocol is pleased to announce its mainnet integration of the Chainlink CNY-USD Price Feed. This Chinese Yuan Renminbi decentralized price oracle supports the launch of our newest algorithmic stablecoin CNYx and is key to further decentralizing a core component of our protocol: the oracle.
Why We Chose Chainlink Oracles
Oracles are a form of middleware that serve as a bridge between the smart contract (on-chain) and data that exists outside of its natve blockchain network (off-chain). Oracles are not simply a data retrieval tool either. Decentralized oracles like Chainlink also increase the reliability of the information provided to smart contracts by aggregating data from multiple oracles and data sources. This removes any single point of failure in the data source and oracle network layer, generating “trust minimization”.
We selected Chainlink’s Price Oracles because they are the most time-tested and provably secure oracle solution, already securing over $10 Billion dollars in value for leading DeFi protocols like Aave and Synthetix. All price feeds are secured by a decentralized network of independent security reviewed nodes operated by leading blockchain DevOps teams. These nodes source data from a multitude of high-quality data aggregators that collect price data from across all trading environments, weight it by volume, and remove outliers. This decentralized setup ensures that Chainlink’s aggregated price feeds are highly available, accurate, tamperproof, and Sybil-resistant. Importantly, they are resistant to various data manipulation attacks, such as those recently carried out using flash loans.
Example of a decentralized Chainlink oracle network
Unlike fixed supply commodities, Dollar Protocol’s “X-series” assets (USDx and CNYx) automatically and proportionally expand and contract the quantity of tokens each user holds (pro-rata) in response to a “TWAP” (Time Weighted Average Price). As such, accurate and decentralized sources of price information are foundational to creating functional elastic commodity-monies.
Dollar Protocol utilizes what is known as a Market Oracle. The Market Oracle receives information regarding the time-weighted average price (TWAP) of a given asset. This piece of external information then determines the magnitude of supply adjustment required for each rebase period, which is displayed on the Dollar Protocol dashboard in real-time. Chainlink oracles will now help supply this price information, further decentralizing the protocol and ensuring it has a high-quality, always available data feed.
“It was of utmost importance that we implemented a best-in-class oracle solution before our transition to a fully-decentralized Governance Alpha, which is set to happen in a few weeks.” said, Robert, DP Core Dev. “We needed an oracle with a high degree of decentralization, reliability, and security for our current and future assets. We’re confident we’ve made the right decision choosing Chainlink, and we look forward to our respective communities enjoying the fruits of this integration.”
About Dollar Protocol
Dollar Protocol is a suite of algorithmic synthetic assets governed by Shareholders. Seigniorage Shares (SHARE) are an ERC-20 token that simultaneously gives its holders on-chain voting rights to make protocol amendments and upgrades, as well as receiving seigniorage profits.
SHARE holders govern a suite of algorithmic synthetic assets, including USDx, EURx, and CNYx. These assets self-stabilize using protocol-enabled supply expansions and contractions around a Time Weighted Average Price (TWAP) oracle from the incentivized trading pool on Uniswap.
Governance forum: https://gov.dollarprotocol.com
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.