To support the influx of parachain teams and smart contract developers who are turning to Polkadot for a highly flexible and scalable network protocol, teams in the Polkadot ecosystem are continually rolling out new core essentials like networking layers, consensus algorithms and Substrate pallets, allowing developers to build customizable blockchain applications for the Polkadot ecosystem with ease.
Polkadot developers need robust tooling to leverage the full potential of Polkadot’s multichain environment. To realize a fully functional infrastructure for the Polkadot ecosystem, there’s a need to integrate a reliable and flexible oracle solution for accessing secure price reference data across any parachain.
Since the last update, there has been significant development work completed on the Polkadot - Chainlink integration, culminating in Chainlink making their extensive collection of on-chain Price Feeds available as a Substrate oracle pallet. Chainlink Price Feeds will allow smart contract applications across the Polkadot ecosystem to access accurate, up-to-date and tamper-proof price reference data for powering new products and markets. Importantly, Chainlink Price Feeds can also be accessed by other pallets integrated into a particular parachain, opening up powerful new functionality for parachain teams.
Chainlink is now integrated directly as a pallet, giving teams in the Polkadot ecosystem—specifically teams building parachains based on the Substrate framework—a straightforward approach for accessing high-quality external market data. Now, both non-native parachain teams and projects building applications on top of a parachain can integrate the Chainlink oracle pallet as a runtime module using any supported smart contract languages.
The Chainlink oracle pallet can be added to the runtime by the native team either before it connects to the Relay Chain or after it has connected as a parachain by proposing an on-chain runtime upgrade agreed upon by community voting. Either of these approaches allow developers to leverage Chainlink Price Feeds with limited technical effort. This integration supports the many smart contract applications and parachain pallets requesting access to Chainlink Price Feeds across Polkadot’s environment.
How Chainlink Price Feeds can help secure Polkadot’s multichain environment
Chainlink is a decentralized network of oracles that securely and reliably connects smart contracts to real-world data and off-chain computation existing outside their native blockchain. Chainlink oracle networks already secure billions in smart contract value and are relied on by leading DeFi, insurance, NFT and gaming projects.
While Chainlink’s flexibility will be used to access a wide variety of external data and off-chain computation, the initial focus will be on bringing Chainlink’s growing selection of data feeds to all parachains in a standard, easy-to-integrate manner. Some of the unique advantages of these Chainlink Price Feeds include:
- High-Quality Data — Node operators source data from numerous high-quality data aggregators. Thus, Chainlink Price Feeds represent a volume-adjusted aggregate generated from hundreds of exchanges to ensure accurate price data and broad market coverage resistant to API downtime or data inaccuracies/manipulation (e.g. protected from flash loans).
- Decentralized Infrastructure — Chainlink Price Feeds are decentralized at the data source and oracle node level, creating multiple layers of redundancy that ensure only fresh, high quality data is broadcast on-chain.
- Secure Nodes — Chainlink nodes are operated by a large number of independent, professional DevOps teams, which are both security-reviewed and have long and on-chain verifiable histories of providing high uptime during all network conditions.
- Cost Efficiency — Chainlink Price Feeds operate on a shared cost model where any number of teams can use and fund the same oracle network, meaning they can get access to Chainlink’s data and security at a fraction of the total cost.
Enabling scalable DeFi applications on Polkadot with Chainlink oracles
By integrating Chainlink Price Feeds as an oracle pallet available to the Polkadot ecosystem, developers can build high-performance DeFi applications on various parachains using a rapidly expanding collection of on-chain datasets around cryptocurrencies, commodities, FX rates and other asset classes.
Smart contract applications and other pallets running across any parachain can use Chainlink Price Feeds to perform various functions, including:
- Settle cross-chain DeFi contracts.
- Power liquidation mechanisms to ensure platform solvency and the safety of user funds.
- Confirm that various stablecoins, cross-chain assets and tokenized assets are fully collateralized by their off-chain reserves.
- Trigger supply mechanisms in accordance to some reference asset.
- Automate on-chain execution strategies based on external network conditions.
Now, externally-connected smart contract application developers can build on Substrate while leveraging Chainlink Price Feeds. This integration with the Chainlink Network will expand to bring a wider range of data feeds and off-chain computations to Polkadot developers in the future.
"With Chainlink’s widely adopted price feeds directly integrated as an oracle pallet, developers across Polkadot's ecosystem have the highly secure and reliable price reference data they need to create the next generation of high-performance decentralized applications. Chainlink offers a high-quality oracle solution by combining high-quality data with robust oracle network security, meaning parachains and the dApps they support won’t have to spend time building out oracle infrastructure for their applications from scratch."
Peter Mauric, Head of Public Affairs at Parity Technologies
"We’re excited to empower developers across all parachains by providing them with a standardized, easy to integrate oracle solution for access to a wide range of high-quality, time-tested on-chain price feeds. By doing so, we can rapidly accelerate DeFi development within the Polkadot ecosystem, while maintaining the highest security and data quality requirements to ensure its growing suite of DeFi projects run in a precise, tamperproof and hyper-reliable manner."
Daniel Kochis, Head of Chainlink Business Development
Chainlink is the most widely used and secure way to power universally connected smart contracts. With Chainlink, developers can connect any blockchain with high-quality data sources from other blockchains as well as real-world data. Managed by a global, decentralized community of hundreds of thousands of people, Chainlink is introducing a fairer model for contracts. Its network currently secures billions of dollars in value for smart contracts across the decentralized finance (DeFi), insurance and gaming ecosystems, among others.
Chainlink is trusted by hundreds of organizations to deliver definitive truth via secure, reliable data feeds. To learn more, visit chain.link, subscribe to the Chainlink newsletter, and follow @chainlink on Twitter. If you’re a developer, visit the developer documentation or join the technical discussion on Discord.