VuFi Integrates Chainlink Price Feeds to Help Regulate Price Elasticity for VuFi Stable Coin.
We’re excited to announce that VuFi — issuer of the asset-backed cryptocurrency VuFi stable coin — has integrated Chainlink Price Feeds as part of an innovative price tracking mechanism. By integrating the industry-leading decentralized oracle network, VuFi has access to high-quality, tamper-proof price feeds needed to provide price elasticity for the VuFi coin. This will provide our users with stronger assurances that VuFi will remain stable and elastic during price movements by having a price metric to rebase against.
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.
It is important for us to have access to constant, reliable price data. When VuFi prices are moving in relation to the US Dollar, there are a lot of things to consider. For instance, if its market price does not perfectly reflect the Consumer Price Index of the inflation of the US Dollar, it must reconcile to reach a state of equilibrium. This is achieved through programmatic expansion / contraction of the total VuFi supply, made possible through an elastic supply protocol. These supply expansions or contractions are called rebases.
At the highest level, a rebasing protocol exists to do one thing: correlate a synthetic asset’s price perfectly with the price of its underlying asset. This is achieved by adjusting the synthetic asset’s supply until its market price reaches its target price (the price at which the synthetic asset is at equilibrium with its underlying asset).
In order to help secure our USD price feeds, 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.