Venus Upgrades its Oracle Mechanism to Chainlink Across All Lending Markets

This post was originally published on Venus Protocol

We are excited to announce that Venus, a money market and synthetic stablecoin protocol built on Binance Smart Chain (BSC), has now fully upgraded to Chainlink as its oracle solution. Our lending markets leverage Chainlink to price collateral during both loan issuance and liquidation processes, ensuring Venus is always fully collateralized and referencing fair market prices.

As the most widely used and time-tested decentralized oracle network, Chainlink provides the much needed security, reliability, and data quality needed to scale our fast growing ecosystem, which already has over $3.5 Billion in total value locked (TVL) shortly after launch. Importantly, Chainlink is already running directly on BSC, making the integration quick and straightforward. Additionally, it allows us to leverage Chainlink oracle networks at the native speeds of BSC, resulting in more timely price updates in a cost efficient manner.

Understanding Venus and its Need for Chainlink

Venus protocol is a decentralized marketplace built on Binance Smart Chain, where lenders can provide liquidity on various assets to earn interest. Liquidity providers receive redeemable LP in return that can be used to purchase other assets as a means of hedging. Alternatively, borrowers can use their own crypto as collateral to obtain overcollateralized loans in other cryptocurrencies or to mint Venus’s own overcollateralized stablecoin VAI — the first decentralized stablecoin built on BSC. By running on BSC, Venus supports fast, low-cost transactions while users are able to access a deep network of wrapped tokens and liquidity.

In order to have a fully algorithmic money market, Venus requires price data to determine the value of the underlying collateral lent and borrowed by users. This price data is needed in two important processes, loan issuance and loan liquidations. Every time a user requests a loan, Venus needs the fair market value of the underlying collateral to determine the loan size. Additionally, Venus protocol needs to perform consistent checks on the health of loans to guarantee they are always overcollateralized, ensuring users are protected against under-collateralization risks.

Since cryptocurrencies trade across hundreds of centralized and decentralized exchanges simultaneously, it’s key that Venus have aggregated, volume adjusted market prices reflective of all trading environments when issuing and liquidating loans. Such aggregated price information is not inherently available on BSC, thus, requiring an oracle to retrieve it and broadcast it on-chain. This is where Chainlink comes into play.

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Chainlink: The Most Secure and Reliable Oracle Network

After using a different oracle solution for our initial launch, we upgraded to Chainlink due to the superior guarantees it provides around data quality, oracle security, and network transparency. Our adoption of Chainlink was especially critical because Venus is the largest TVL project running on BSC, which means we require the most robust and proven infrastructure to secure critical lending/borrowing functions.

Since Chainlink is already is already up and running on the BSC mainnet and provides price feed oracles that secure over $10 Billion dollars in on-chain value for top Ethereum DeFi applications like Aave and Synthetix, it made for an obvious choice to integrate into the Venus Protocol. It was also quick and easy to deploy, resulting in very little time and effort needed on our behalf.

Some of the key features that caused us to switch to Chainlink include:

  • High-Quality Data: Chainlink Prices Feeds source data from numerous premium off-chain data aggregators like BraveNewCoin, which collectively pull price data from hundreds of crypto exchanges, weight it by volume, and remove outliers. This ensures Venus consumes accurate price data while avoiding downtime and data manipulation attacks on a single or small set of echanges.
  • Proven Reliability: Chainlink Price Feeds are secured by numerous independent, security reviewed node operators run by leading blockchain DevOps and security teams, leading to strong uptime and Sybil resistance
  • Decentralized Security: Chainlink Price Feeds are decentralized at the data source and oracle network level, resulting in highly-available and tamper resistance on-chain data feeds without any centralized point of failure or single source of truth.
  • Proven Performance: Chainlink Price Feeds can be independently monitored on-chain and verified within reputation frameworks, proving the quality of their performance and the strong crypto-economic incentives backing them.

It’s for these reasons and more that we have integrated Chainlink throughout all of Venus’ money markets, bringing unprecedented security and trust to our ecosystem. We plan to continue working with Chainlink to scale up support for even more assets in the future, establishing Venus as the most liquid and secure monet market on BSC.

“As the market leader in providing credit to the BSC ecosystem, it was critical that we scale up our security by upgrading to Chainlink as a means of thoroughly protecting our users’ funds and guaranteeing they alway get fair market prices. Not only are we able to leverage Chainlink’s time-tested security, but it’s native operation on BSC allows us to get consistently fresh data for a much lower price.” — Joelito Lizarondo, Founder Venus Protocol and CEO of Swipe Wallet.

About Chainlink

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.

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About Venus

Venus Protocol is an algorithmic-based money market system designed to bring a complete decentralized finance-based lending and credit system onto Binance Smart Chain. Venus enables users to utilize their cryptocurrencies by supplying collateral to the network that may be borrowed by pledging over-collateralized cryptocurrencies. The difference of Venus from other money market protocols is the ability to use the collateral supplied to the market not only to borrow other assets but also to mint synthetic stablecoins with over-collateralized positions that protect the protocol. Venus utilizes the Binance Smart chain for fast, low-cost transactions while accessing a deep network of wrapped tokens and liquidity.

Visit https://venus.io/ to learn more.


Venus Upgrades its Oracle Mechanism to Chainlink Across All Lending Markets was originally published in Venus Protocol on Medium, where people are continuing the conversation by highlighting and responding to this story.

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