On 25th March, Kava Labs announced its long term partnership with Chainlink as it will be integrating Chainlink’s oracles to strengthen its own DeFi ecosystem.
Kava built on Cosmos blockchain uses the world’s first cross-blockchain to deal with multiple digital assets as CDP [Collateralized Debt Position] in one product. Using the platform, hodlers collateralize various cryptocurrencies in exchange for loans.
Reports suggest Chainlink to be one of the biggest collectors of secure and decentralized on-chain price reference data. The data is composed of security reviews, Sybil resistance and independent nodes that create a shared global resource.
Kava Labs believe that “Chainlink greatly exceeds every other oracle mechanism across all parameters” and has integrated its oracles to bolster decentralized finance with secured real-time price data.
“Chainlink’s Price Reference Contracts are not only decentralized using many of the same high quality node operators that power Kava, but are also uniquely hardened against various manipulation attacks that are not as well known or even understood by oracle mechanisms other than Chainlink. Chainlink provides our USDX with a battle tested oracle that is resistant to various attack vectors.”
Chainlink has been one of the most popular cryptocurrencies in 2020. It is a distributed oracle network that connects smart contracts on the blockchain to external resources including real-world data, web APIs, real-world events and payment networks.
A decentralized oracle network that connects smart contracts with off-chain data, events, and payments known as the LINK network is the heart of the protocol.
But why Chainlink, what stands out in their oracle mechanism?
Smart contracts aren’t as smart as they sound. There are pure instructions of code that are only executed when oracles feed data to them. For instance, if some kind of malicious data is fed, the smart contract processes the data as it is. This is also called the “oracle problem” in the tech world.
This is where Chainlink gets into the entire problem-solving statement. It is a decentralized blockchain that bridges the gap between smart contracts and oracles. The nodes on Chainlink’s network act as smart contracts, each node has a job to perform; a particular, independent decentralized computation to validate the authenticity and accuracy of the data that the smart contracts intake.
Apart from this a couple of points why companies like Kava choose Chainlink are:-
- Higher quality data from credential/premium APIs as compared to current market players
- A rigorous security review process for data, reducing the attack surface area of the oracle mechanism
- Most decentralized Oracle mechanism with hundreds of nodes worldwide and feasible scalability.
- Proven track record of servicing smart contracts live on the mainnet. Protocols and companies dealing with millions of dollars rely on its secure and reliable data.