XVIX Integrates Chainlink Oracles On Mainnet to Secure Permissionless Leverage Trading Markets
The XVIX project is proud to announce our integration of Chainlink Price Feed oracles into the X2 protocol to provide secure and reliable price data for fully decentralised and permissionless leverage trading.
Using the market-leading Chainlink Price Feeds, the X2 protocol will be able to let anyone launch their own leverage market for any of the wide range of assets supported by Chainlink. We are currently using the ETH-USD Price Feed to determine entry and expiry prices for leveraged positions, and we will integrate additional feeds every two weeks moving forward, allowing XVIX to rapidly grow our leveraged markets based on community demand.
We selected Chainlink because it has the largest collection of decentralized on-chain price oracles, spanning numerous cryptocurrencies and assets classes, along with proven security and accuracy to ensure users are protected against any type of data manipulation attack, such as flash loan induced ones recently experienced by some DeFi projects.
X2 and The Need for Chainlink
The X2 protocol is deployed on the Ethereum blockchain and provides a simple way for anyone to buy leveraged BULL or BEAR tokens with zero spread and zero slippage.
If you buy one 3X ETH/USD BULL token, and the price of ETH increases by 10%, then you would end up with 1.3 BULL tokens that can be redeemed for 1.3 ETH. The profits for BULL tokens come directly from the losses of BEAR tokens and vice versa.
While the system can adjust its own balances, the smart contracts require a fair market price for the underlying asset when redeeming them. Because prices are used to determine the winning side of each trade, it is important for it to have a safe and reliable price feed so that the market cannot be manipulated.
Price oracles that rely on a single exchange or even a small group of exchanges are vulnerable to price manipulation attacks where a highly collateralized attacker can impact the spot market price from a single exchange, which has become more common via the use of flash loans. These attacks can even happen to large exchanges too, with minimal technical requirements. To protect against this, we need a decentralised oracle with high-quality, tamperproof data and data delivery to secure our users’ funds.
Chainlink Protects X2 Users From Price Oracle Manipulation
Of the oracle solutions that we reviewed, Chainlink provides the most reliable price feeds for a wide range of assets, along with being very easy and quick to implement into the X2 protocol. Some of the features Chainlink Price Feeds provide include:
- High-quality price data: Chainlink sources data from hundreds of exchanges via numerous data aggregators to ensure each price point represents a volume-adjusted marketwide aggregate.
- Decentralized security: Price data is decentralised at both the data source and oracle node level to generate highly available and tamper-resistant data feeds.
- Experienced infrastructure operators: Oracle networks are made up of numerous independent oracle nodes operated by experienced and security-reviewed blockchain DevOps to maintain reliable services and Sybil-resistance.
- Easy-to-Use Documentation: Chainlink has well written documentation and technical support for quickly integrating Chainlink Price Feeds, empowering developers to focus on their core product instead of oracle infrastructure.
This design fits in perfectly with the kind of system that we want to build. It allows the X2 protocol to scale and handle very large amounts of capital without having to worry about any collusion or corruption of pricing data.
Chainlink’s data aggregation also helps protect X2 users from temporary large wicks that lead to unnecessary losses seen on other leverage trading platforms.
Each time a user buys or sells a BULL or BEAR token, the X2 market reads the latest price from the Chainlink Price Feed on-chain reference contract to determine the entry and exit price.
A very useful feature of Chainlink price feeds is the availability of historical data, this allows us to take into account both the current price and the previous price when settling profits / losses which lets the X2 protocol be front-running resistant while remaining fully decentralised.
The integration of Chainlink oracles into the X2 protocol was a very smooth process because of their developer-friendly API. With provably secure and reliable price oracles and support from their team when it came to technical questions, we know that X2 users will now be able to trade leveraged assets on X2 with confidence that they will function as intended. — X, XVIX Developer
Try out X2
The X2 protocol is live on the Ethereum mainnet today: https://xvix.finance/trade
All contract code is also fully open sourced: https://github.com/xvi10/x2-contracts
Chainlink is the most widely used and secure way to power universal 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.
The XVIX project is building components to become a subsystem for DeFi. The first of these is the X2 protocol with more products soon to be released.
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