Exactly Protocol has successfully integrated Chainlink Price Feeds, streamlining the process of connecting smart contracts to asset prices.
This integration enables developers at Exactly “to provide a more secure and efficient user pricing mechanism.”
At Exactly, they aim “to democratize a new generation of financial services by offering user-friendly, secure, open-source, and non-custodial solutions.” The protocol enables users “to deposit and borrow crypto assets at fixed and variable interest rates in a decentralized way.”
As the financial landscape rapidly evolves, they “envision a world where decentralized finance becomes an integral part of daily life.” Their commitment “to removing barriers and simplifying complex processes empowers individuals to take control of their finances.”
As noted in the update, Exactly claims it is “the first borrowing and lending protocol to determine fixed interest rates based on the Utilization Rate of pools with different maturity dates.”
This innovative approach “means that the protocol does not require a custom Automated Market Maker (AMM) to trade maturity tokens; instead, it only needs a variable rate pool that consistently provides liquidity to the different fixed-rate pools.” In addition, this mechanism allows them “to offer both fixed and variable interest rates in the same protocol for the first time at DeFi.”
As covered, Chainlink claims it is “a decentralized network of oracles that securely connects smart contracts with real-world data and services outside blockchain networks.” It is the most widely used data provider solution “across major smart contract verticals, including DeFi, insurance, NFTs, and blockchain gaming.”
As mentioned in the update, access to financial market data “is crucial for ensuring the security of crypto assets managed by decentralized applications (dApps).”
However, obtaining financial market data is “challenging for DeFi protocols due to the inherent disconnect between blockchains and the outside world.” Most high-quality financial market data is generated off-chain, which creates the “oracle problem.”
Addressing the oracle problem necessitates secure “oracle” middleware, “providing blockchains with access to off-chain data and services.”
Oracles are vital “for DeFi as they power on-chain price feeds that enable DeFi applications to quickly access the current or historical price of various crypto assets during critical functions.”
Insecure price oracles “have resulted in tens of millions of dollars worth of losses, making secure price oracles essential for safeguarding the billions of dollars within the DeFi ecosystem.”
Chainlink Price Feeds “are on-chain reference contracts automatically updated by decentralized oracle networks (DONs) consisting of Chainlink nodes.”
Each reference contract “stores an asset’s latest and historical price in the form of an exchange rate, which smart contracts can then query on-demand.” Every Chainlink Price Feed “runs on a specific blockchain network and regularly updates with fresh data based on predefined parameters.”
At Exactly, all asset prices, “including stablecoins, are accurately reflecting by querying data from the Chainlink price feeds oracle.” This method “eliminates the need for hardcoded values, ensuring dependable and current pricing information for users.”
On Ethereum Mainnet, the Auditor smart contract “obtains and uses prices to calculate accounts’ collateral and debt values in ETH denomination.”
In this way, an extra call (ETH-USD) is “saved, which translates to a reduction in gas consumption for liquidity checks.”
On Optimism, prices are currently “retrieved and used in USD denomination due to lower availability in price feeds offered by Chainlink.”
It’s important to notice “that this difference is only spotted at a smart contract level and does not imply any variation in the result of the health factor calculation.” The web app “shows prices in USD denominations for a better understanding from a user’s perspective.”