HyperDAO Integrating Chainlink as the Standard Oracle Solution to Power its DeFi Platform
HyperDAO is committed to creating a highly secure, fully-functional decentralized financial services platform that serves as a one-stop shop for all financial needs. In the next step of realizing this vision, HyperDAO is integrating Chainlink’s world-class decentralized oracle network to bring high-quality market data to its DeFi products. Due to Chainlink’s robust set of features and premium focus on security, HyperDAO plans to make Chainlink its default oracle solution used throughout HyperDAO, and recommend it to all our developers.
Chainlink provides a highly secure and reliable oracle mechanism for sourcing and delivering off-chain data to HyperDAO’s DeFi ecosystem. Chainlink also supports credentialed APIs, which enables access to premium data procured by professional data companies. When combined, HyperDAO’s DeFi ecosystem gets a steady stream of accurate market data provided by reliable oracle services in a completely decentralized manner.
HyperDAO will use Chainlink to build a variety of DeFi products that rely on external market data, such as stablecoins, decentralized exchanges, crowdfunding services, asset management & banking tools, and much more.
HyperDAO is a blockchain for building DeFi applications, specifically through smart contracts that execute automatically based on data. Since blockchains are self-contained environments, they need oracles to understand what’s happening outside the blockchain. It’s particularly important for DeFi applications that need to know the current price of an asset, interest rates, or exchange rates.
Most liquidity and therefore price discovery happens across many different centralized and decentralized exchanges. As a result, getting the true price of an asset requires the aggregation of many different sources. It also requires the use of many oracles; having one oracle solely responsible for supplying a decentralized smart contract with data is a single point of failure. Without end-to-end decentralization, the entire security of the smart contract is at great risk.
Chainlink is a decentralized oracle network that currently provides decentralization at both the oracle and data source level. By using an aggregation of multiple independent Chainlink nodes, the user can protect against one oracle being a single point of failure. Similarly, using an aggregation of multiple data sources for determining market prices, the user can protect against one data source being the absolute source of truth.
Chainlink is the only decentralized oracle network currently providing pricing data to numerous live applications. It’s Price Reference Contracts cover nearly 30 DeFi trading pairs (BTC/USD, GBP/USD, XAU/USD, etc), which are collectively responsible for nearly $200M in USD value. While other oracles are sourcing market prices from a few exchange APIs or free APIs/trial plans, Chainlink nodes source from premium APIs, specifically high-quality data aggregators such as BraveNewCoin, which provides market data to Bloomberg terminals. Chainlink also uses high-quality node operators in its decentralized oracle networks, mostly run by leading blockchain DevOps and security teams. Each Price Reference Contracts has between 7–21 nodes and at least 7 different data sources, which collectively secure a single price feed.
HyperDAO’s Plan For Integrating Chainlink
HyperDAO’s decentralized, collateral-backed stablecoin protocol is the backbone of the entire HyperDAO DeFi ecosystem. It allows users to receive stablecoin loans by locking up digital assets as collateral. Unlike other stablecoins, HyperDAO’s stablecoin will offer flexible, cross-chain capabilities that allow users to collateralize multiple asset types in exchange for a variety of fiat-pegged digital stablecoins, such as Hyper-USD, Hyper-EUR, and Hyper-CNY. Additionally, users contributing collateral enjoy higher interest income compared to traditional bank savings accounts.
In order for HyperDAO’s stablecoin to be a reliable form of stability, it needs consistent and accurate pricing data to enforce liquidation ratios. Since stablecoin loans are overcollateralized, liquidation ratios must be maintained to protect the collateral pool against downward price movement. Each time a liquidation is called, HyperDAO will source market prices from a set of Chainlink Price Reference Contracts to see if the user’s current collateral value is below their liquidation price.
The other piece of key infrastructure for HyperDAO’s DeFi ecosystem is a decentralized exchange (DEX). A DEX provides a non-custodial solution for peer-to-peer trading of digital assets. To compete with centralized exchanges, DEXs need to offer advanced functionality to attract experienced traders. One of those functionalities is stop-loss orders, which allow users to mitigate risk by automating trades based on price movements.
HyperDAO plans to build and/or leverage existing Chainlink Price Reference Contracts as reliable price feeds to trigger different types of stop-loss orders on HyperDAO’s DEX. Since stop-loss functions are automated trading strategies for traders, it’s especially important to protect user’s funds by using Chainlink’s reliable oracle mechanism and high-quality data. This ensures prices are reflective of the price discovery happening throughout the entire market and no small group of oracles can manipulate these DEX functions.
Crowdfunding via the HDAO token is an important initiative for HyperDAO; we’re already working with a well-known blockchain crowdfunding platform that’s provided financing help to over 70 blockchain projects. Typically, a crowdfunding campaign is concluded once a set amount of funds is raised. However, the price volatility of digital assets combined with the high-demand of HyperDAO crowdfunding, makes determining exactly when a target is reached difficult to calculate in real-time. In fact, the fastest crowdfunding campaign from HyperDAO took a mere 37 seconds to conclude with more than 20,000 ETH raised.
HyperDAO intends to resolve these issues by using Chainlink’s development framework to build a high-performance oracle mechanism. By getting a steady stream of reliable prices, crowdfunding campaigns become a more trusted form of raising money. Projects can’t raise an excessive amount of funds, while a users’ contribution percentages are more accurately recorded.
Asset Management & Banking Services
Accurate reflections of market data are crucial for the HyperDAO network to operate efficiently. Imagine a banking system with inaccurate lending or exchange rates! As a decentralized financial ecosystem, HyperDAO’s asset management and banking services must fetch lending rates, exchange rates, and asset prices from various centralized and decentralized platforms to determine a reliable point of reference.
By leveraging Chainlink’s Price Reference Contracts and/or building customized oracle networks for specific pieces of data, HyperDAO is able to pioneer the development of a decentralized digital bank. Instead of relying on HyperDAO to supply lending and exchange rates, users can be assured that critical banking services are executed based on objectively accurate data. Chainlink’s decentralized oracle networks ensure that rates are aggregated across all the top data sources and redundantly verified by numerous independent nodes.
“HyperDAO prides itself on being a market-leading, one-stop shop provider for decentralized financial services. A critical component to realizing this vision is a robust oracle network that can securely and reliably access highly accurate off-chain data and deliver it on-chain. Chainlink is the only oracle network that’s proven its ability to secure high-quality data live on mainnet, making it the perfect go-to oracle solution for HyperDAO. By integrating with Chainlink, we are confident that we can move to the next stage of development and bring fully integrated DeFi products to the global market.” — Jayden Wei, Co-founder and Chief of Strategy at HyperDAO
If you’re a developer and want to connect your smart contract to existing data and infrastructure outside the underlying blockchain, reach out to us here. We can help you quickly and securely launch your data-enabled application or Chainlink Price Reference Data Contract on mainnet today. Learn more by visiting the Chainlink website, developer documentation or follow us on Twitter or Reddit. You can also join the technical discussion on Discord.
Chainlink is a decentralized oracle network that enables smart contracts to securely access off-chain data feeds, web APIs, and traditional bank payments. It is well known for providing highly secure and reliable oracles to large enterprises (Google, Oracle, and SWIFT) and leading smart contract development teams such as Polkadot/Substrate, Synthetix, Loopring, Aave, OpenLaw, Conflux, and many others.
HyperDAO aims to establish a complete DeFi (Decentralised Finance) ecosystem, providing clients with a decentralized financial infrastructure. DeFi holds openness, fairness, and interconnection at its core. Based on distributed ledger and blockchain technology, HyperDAO is going to build a financial services ecosystem including collateral-backed stablecoins, decentralized community crowdfunding, decentralized wallets, cloud exchanges, market forecasts, asset management, microfinance, and e-citizen information systems, with the ecosystem continuing to grow in the future.
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