UPFI is Integrating Chainlink Price Feeds on Solana to Manage Monetary Operations of its Stablecoin
We’re excited to announce that UPFI Network is integrating the industry-leading Chainlink Price Feeds on Solana as its oracle solution to help maintain the peg of its partially collateralized and partially algorithmically stabilized stablecoin called UPFI. The initial integration involves the use of the Chainlink USDC/USD Price Feed, which is referenced during all mints and redemptions.
We selected Chainlink because it’s the most time-tested decentralized oracle network in the industry, with Chainlink Price Feeds already helping secure tens of billions of dollars in value across DeFi. Not only do Chainlink Price Feeds support high-quality data with robust uptime and manipulation-resistant infrastructure, but they provide the custom update frequencies required to maintain our unique stablecoin design on Solana.
UPFI is a partially collateralized and partially algorithmically stabilized token soft-pegged to the U.S. Dollar. The protocol’s goal is to keep the UPFI token price stable. Two tokens are used as collateral: USDC and the UPFI share token (UPS). When a user mints UPFI by depositing USDC and UPS, the USDC is locked in the protocol, and the deposited UPS is burnt. When a user redeems UPFI for the underlying collateral, the user gets their deposited USDC back, and the protocol mints UPS. This dual-collateral design along with the redemption mechanism helps to keep the price of UPFI stable.
For our smart contracts to accurately calculate in real-time the price of collateral during minting and redemptions, we needed an oracle solution that can fetch highly precise USDC/USD exchange rates and deliver them on-chain securely and reliably. This price oracle is critical to maintaining both the peg and protocol solvency.