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Elastos Ethereum Sidechain to Offer a Cross-Chain Stablecoin Powered by Chainlink Oracles
The Elastos Info Team is excited to announce the integration of Chainlink, the market-leading decentralized oracle network, to power a cross-chain stablecoin protocol built on the Elastos Ethereum Sidechain. The Cyber Republic ETH Task Force will deploy an ELA/USD decentralized price feed using Chainlink’s Price Reference Data framework as the basis for collateralization checks on users’ Collateralized Debt Positions (CDPs), thereby ensuring full stablecoin collateralization.
An Elastos stablecoin will bring much-needed stability to both the Elastos ecosystem and the greater DeFi space, providing users access to a reliable form of cross-chain payment and collateral that is not vulnerable to market volatility. This integration represents one of many DeFi implementations developers may leverage via Chainlink, including exchange rates for trading synthetic assets and issuing loans, as well as non-DeFi use cases such as content monetization and reliable price algorithm development for web Apps.
Decentralized Finance Comes to the Modern Internet
One of Elastos’ key features is the massive hashpower it leverages to secure its sidechains – in particular, its DPoS-based Ethereum Sidechain, which boasts a 400+ TPS performance. DPoS nodes are elected with ELA, the native token of Elastos which is secured by its hashpower-backed main chain. In fact, the Elastos main chain is currently backed by more than 50% of the Bitcoin network’s hashpower. As such, Elastos is well poised to be the computing backbone for a robust DeFi ecosystem, as its abilities to scale in throughput, support low cost transactions, and provide high-level security represent significant competitive advantages in the blockchain space.
To demonstrate the value available to DeFi users, the Cyber Republic-sponsored ETH Task Force plans to launch a stablecoin protocol that collateralizes ELA and mints stablecoins pegged to USD. Not only will such a stablecoin provide greater utility to ELA holders, but it will generate a stable, digital currency that can be used on Elastos for payments and throughout DeFi as collateral.
Every time an ELA stablecoin is minted, the user receives a collateral price floor at which a liquidation is to be triggered. If the market price of ELA falls below a designated liquidation price, the user’s CDP position is liquidated. Chainlink’s ELA/USD price feed plays a critical role in supporting this process by providing reference prices used to trigger liquidations.
After researching a wide array of solutions across the market, Chainlink emerged as the clear-cut choice for the Elastos ecosystem. Chainlink’s Price Reference Data model is designed for building decentralized oracle networks, and has been proven to provide users with reliable service and industry-leading security. Their price oracles currently secures over 1B USD in mainnet value for leading DeFi protocols, and employs decentralized system architecture to ensure there is no single point of failure at the node and data source level.
Most importantly, Chainlink maintains strong quality control of its price oracles, using only secure node operators and high quality data sources to create an aggregated price feed that users can rely on to secure their funds. Chainlink’s price data is sourced from numerous data aggregators, providing strong market coverage that consistently reflects volume-adjusted prices from an aggregation of all trading environments. Such a distributed model prevents sandwich attacks and other attempts at price manipulation and distortion from affecting Elastos’ stablecoin.
Beyond Elastos’ stablecoin, developers can use Chainlink Price Reference Data feeds to launch additional DeFi products on Elastos for lending and borrowing, synthetic assets, asset management, tokenization, and much more.
Chainlink and Elastos: Looking to the Future
Moving outside of DeFi, we envision a much broader Elastos ecosystem of advanced dApps that can begin development with the support of new features to securely connect with real world data and traditional infrastructure. Chainlink’s tamperproof, high-availability data, combined with the tremendous hashrate and flexibility of Elastos’ DPoS Ethereum Sidechain will provide a highly resilient platform for developers to build the decentralized internet with both superlative security and performance.
- Randomness within games is a critical component for minting rare items and producing unexpected odds. Elastos provides the layer-1 infrastructure for developers to build high-throughput blockchain games, while Chainlink’s Verifiable Random Function (VRF) offers a provably secure and auditable source of on-chain randomness. This allows users to trust the authenticity of random in-game functions, such as issuing random economic rewards like loot boxes and NFTs (non-Fungible Tokens).
- Another key use case for decentralized oracle data is a ride-hailing dApp like the one Dacsee is building with Elastos. Dacsee can use Chainlink to integrate traffic, weather, and public transportation data from a multitude of premium APIs to gauge its pricing models. Dacsee and other like-Applications can leverage newly available data to improve service by, for instance, increasing the supply of drivers during poor weather conditions or a public transportation system breakdown. Ultimately, users benefit from greater flexibility, superior rates, and an overall improved customer experience.
Clarence Liu, VP of Development and advisor on the Cyber Republic ETH Task Force, sees great collaboration potential between the two projects, stating that, “Integrating Chainlink allows us to bring powerful new financial primitives to the DeFi market, particularly through a cross-chain stablecoin powered by our high-throughput Ethereum Sidechain. This provides users across any chain with a stable form of collateral that is constantly updated to reflect the current market price via Chainlink price feeds. We envision this as the first of many integrations where Elastos developers build next generation dApps connected to real-world data.”
If you’re a developer and want to quickly get your application connected to Chainlink Price Reference Data, visit our developer documentation and join the technical discussion in Discord. If you want to schedule a call to discuss the integration in greater depth, reach out here.
Chainlink is an open source blockchain abstraction layer for building and running decentralized oracle networks that give your smart contract access to secure and reliable data inputs and outputs. It provides oracles to leading DeFi applications like Synthetix, Aave, and Kyber Network; numerous blockchains such as Ethereum, Polkadot, and Tezos; as well as large enterprises including Google, Oracle, and SWIFT.
Founded by OS expert Rong Chen, Elastos is building the blockchain industry’s most comprehensive and interoperable open source platform. Using a hybrid consensus that combines the secure hashpower of Bitcoin and the democratic ideals of Delegated-Proof-of-Stake, the SmartWeb of Elastos is a suite of software for an entirely decentralized internet. Elastos employs not only blockchain technology, but a peer-to-peer network for communication, decentralized data storage services, and a decentralized ID (DID) system for all digital assets. With sidechains like Ethereum, Elastos is not merely the foundation for securing truly decentralized applications that can scale, it is the foundation for true data ownership.
elastOS, the flagship product of the Elastos Smartweb, brings the entire decentralized ecosystem into a single App, currently available for Android and in development for both iOS and desktop.
Elastos is also actively searching for both new and existing dApp projects through its Cyber Republic initiative. Cyber Republic possesses a community-governed grant fund designed to help startups and existing businesses explore blockchain. You can read more about Cyber Republic at https://www.cyberrepublic.org.