Chainlink Integration Looks to Catalyze DeFi Development on Avalanche
Avalanche, a faster, cheaper alternative to Ethereum, has incorporated data feeds from Chainlink, the market-leading blockchain oracle.
Smart contracts with external data piped in, such as price feeds, are powering a growing decentralized finance (DeFi) economy of lending apps, decentralized exchanges and price-sensitive derivatives markets.
These types of decentralized applications (dapps) are being built on the high-throughput Avalanche platform that went live in September 2020. Avalanche is similar in some ways to other base-layer blockchains like Solana and Binance Smart Chain, but with a novel consensus system and better compatibility with Ethereum-based smart contracts.
Adding Chainlink data feeds to the mix will kickstart a DeFi ecosystem on Avalanche, said Ava Labs president John Wu.
“There are over 225 projects building on the Avalanche ecosystem, many of them in integration mode, waiting for some functionality such as oracles from Chainlink,” Wu told CoinDesk in an interview. “Some large stablecoins are also shortly down the pike. So this is why we’re so excited.”
Historically, DeFi and blockchain oracles emerged at about the same time, said Chainlink CEO Sergey Nazarov.
“That’s not a coincidence,” Nazarov told CoinDesk in an interview. “The dynamic around DeFi is that you really can’t build it without external data. DeFi is what we call ‘a hybrid smart contract,’ in the sense that it combines on-chain code and off-chain systems.”
The Chainlink network is really a collection of many services that provide various specific data inputs, said Nazarov, where price data informs DeFi, random number generation enables gaming, weather data opens up other use cases and so on.
“The industry was about this one smart contract for tokens. Then it moved to tokens plus voting, and then to tokens and voting using external data,” Nazarov said, adding:
“So tokens are like the unencrypted email of our industry; they are the beginning. Now we are opening the entire universe of what you can build.”