Mushrooms Finance integration with Chainlink
We are thrilled to officially announce Mushrooms Finance has integrated the ETH-USD Chainlink Price Feed live on mainnet to ensure reliable, tamperproof ETH prices used within our Russula Field vault. This yield generating strategy involves depositing WETH into the Russula Field Vault, where it is then used to open a CDP on MakerDAO and mint DAI, and then use that DAI to generate yield via Compound.
By leveraging the Chainlink ETH/USD Price Feed, Mushrooms’ smart contracts have a secure, fair-market price reference when checking the collateralization of its Maker CDPs. If collateralization is found to be below a certain threshold, then Mushrooms’ smart contracts can execute actions to avoid user funds from being liquidated.
Chainlink has established itself as the leading oracle solution in the blockchain industry, already securing over $7B USD in value across leading DeFi projects like Synthetix and Aave. Chainlink oracles enable the development of auto-executing smart contracts based on real-world data and events such as the ETH-USD price feed. This price data is secured by an aggregation of more than twenty independent nodes and numerous premium data sources to guarantee the highest reliability and security of the ETH market price reported on-chain.
Mushrooms Finance provides yield-earning vault products to crypto hodlers who want to earn passive income on their assets like ETH. After receiving WETH deposits (wrapped ETH token compatible to ERC20 standard) in Mushrooms’ Russula Field vault, it will automatically collateralize WETH in MakerDAO to mint $DAI, and then deposit DAI in Compound and auto-harvest the mining rewards to get leveraged compounding returns.
To keep the MakerDAO CDP (collateralized debt position) in a safe range and avoid risky scenarios like unexpected liquidation during volatile market situations, the yield strategy needs a reliable oracle to fetch the up-to-date collateral price, i.e., in this case, the ETH price denominated in USD. Thanks to the integration with Chainlink, Mushroom Finance can provide a safe and robust passive earning strategy utilizing collateralized debt positions.
The integration with Chainlink allows Mushrooms Finance to be responsive in real-time to real-world market trends without compromises on oracle security or data quality. This allows for more reliable and predictable innovations in DeFi. Choosing Chainlink as the oracle data provider is not a difficult decision for us due to its advanced technical design and battle-tested performance on mainnet which already serves a wide range of DeFi projects.
Chainlink Price Feeds consist of decentralized oracle networks that fetch high-quality data from numerous independent data aggregators, who each source prices from hundreds of exchanges, weight it by volume, and remove outliers. Each node operator participating in the Price Feed oracle networks is security reviewed and run by experienced blockchain DevOps and IT teams to ensure reliable services and Sybil resistance.
By decentralizing both the oracle and data source layers, we can be confident that Mushrooms Finance vaults are receiving high quality data in a tamperproof and highly available manner that’s inherently resistant to any single point of failure or data manipulations attack (e.g.; flash loans). Additionally, the performance of oracle networks and their individual nodes can be monitored in real-time by any user to ensure they are getting fair market prices.
“Mushrooms is adding high-value yield capabilities to the DeFi ecosystem using purpose-built farming strategies. By integrating Chainlink Price Feeds, Mushrooms is able to offer automate these passive yield generating strategies with strong protections in place to ensure user funds are not subject to faulty liquidations.” — — Mushrooms Finance Team
Moving forward, we will explore the possibility of using more Chainlink-powered technology such as additional Price Feeds for new vault strategies and the Chainlink Verifiable Randomness Function (VRF) to generate novel rewards systems based on a provably fair and unbiased source of randomness.
Chainlink is the most widely used and secure way to power universal 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 Mushrooms Finance
Mushrooms Finance is yet another crypto earning vault with a focus on seeking sustainable profits in the DeFi universe. We created the first version of Mushrooms Finance smart contracts out of inspiration from popular DeFi projects like Yearn Finance (YFI) and SushiSwap, among many others. Mushrooms Finance integrated with the Keep3r network to enable keep3rs to earn $KP3R for performing tasks involved with maintaining vaults. We also partnered with Cover Protocol to provide DeFi-native insurance for DeFi participants.