Chainlink Boosts Data Access, Dexes Become More Sophisticated, Scalable Payments Are Coming

Hello Defiers and happy Friday! Here’s what’s up,

New Chainlink website provides access to more than 25 decentralized oracle networks
Dex aggregator 1inch launches limit orders
Fuel, Ethereum sidechain for scalable payments, launches testnet
DeFi reaching milestone on top of milestone

and more :)

If you’re receiving this email, that means you’re a paid subscriber a.k.a Defiant OG, (thanks!) That means you’re getting the full content of this newsletter, while free subscribers are getting only a portion of it.

Chainlink Boosting Access to Price Data for DeFi

Data feed provider Chainlink launched a platform which provides increased access to data feeds for Ethereum applications. The website, called Chainlink Price Reference Data For DeFi, connects with more than 25 decentralized oracle networks.

Oracles allow computer programs running on decentralized networks like Ethereum to automatically connect to data that lives outside the blockchain. It’s important that these oracles are timely, reliable and that they’re not controlled by third parties, as that would make them susceptible to manipulation and could jeopardize applications using the data. Chainlink’s system attempts to provide decentralized data feeds that meet these criteria with oracle networks composed of security-reviewed, Sybil attack-resistant, and independent nodes.

Image source: https://feeds.chain.link/

“The DeFi ecosystem now has access to the largest collection of on-chain market data in the entire existence of building open financial products on Ethereum,” Chainlink’s announcement said.

Chainlink’s decentralized oracle networks collectively secure over $100 million in value for DeFi products across financial markets, according to the release. While a few Dapps can operate solely using on-chain data, the large majority of DeFi applications need a steady connection to off-chain data. Increased access to this data will make building these apps easier.

Dexes Become Increasingly More Sophisticated

Decentralized exchange aggregator 1inch is launching limit orders.

💡Dex aggregators are platforms which access liquidity across many decentralized exchanges to easily find the best price to swap tokens. I wrote about them here [Dex Aggregator Game Heats Up With 0x as the Latest Player] 💡

Image source: https://1inch.exchange/#/zrx-limit-orders

Limit orders allow users to place a trade only if it’s able to execute at a specific price. Traders can set that price and have it automatically. This has been usually hard to pull off by dexes as the process needs to be automated via computer programs, so-called smart contracts, and remain non-custodial, but an increasing number of them have implemented the feature in the pas few months (dYdX, Kyber are examples).

1inch, which is using the 0x Mesh network, has 527 listed tokens. Traders using limit orders won’t have to pay fees for market makers, according to 1inch’s website.

Scalable Ethereum Payments Are Closer

A testnet for Ethereum sidechain Fuel is now live. Fuel v0, whose code is open source, will test stability and performance of the scaling solution, which uses optimistic rollup technology.

Blockchains like Ethereum and Bitcoin have arguably been limited in their growth and mainstream adoption because distributed networks are slower at processing transactions than centralized entities. So-called Layer 2 scaling solutions are trying to increase throughput on blockchains, without compromising on security or decentralization and doing so at accessible costs.

The Fuel sidechain is designed to handle large volumes of payments on Ethereum, and aims to reduce the cost of token transfers by at least 5-fold. The solution doesn’t require users to deposit collateral previous to the transfer, like other mechanisms do.

By moving state and state accesses completely off-chain, optimistic rollup is sustainably scalable. Uncontrolled state growth is the largest problem and bottleneck facing Ethereum today. Fuel eliminates this problem in practice completely today, without having to wait for Eth 2.0 or stateless Ethereum.

Fuel uses Bitcoin’s UTXO data model, which allows transfers that swap funds between two parties. “This means scalable and completely non-custodial exchanges can be built on top of Fuel, with only order matching happening off-chain,” according to a Fuel Labs post.

Recent DeFi Milestones:

Thin Applications: Placeholder

Joel Montenegro of venture fund Placeholder writes about the concept of “thin applications,” “fat protocols,” and the “Web3 applications stack.” “Thin Applications are cheaper to run because they push many of the costs to protocols and users. […] it’s similar to the retail model where storefronts act as ‘interfaces’ to various commodity products and differentiate themselves by brand, curation and customer experience. But instead of ‘B2B2C’ think of crypto as P2B2C for Protocol to Business to Consumer.”

Hope you’re enjoying The Defiant! It really helps if you spread the love <3

Share The Defiant

The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money.

About the author: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. (Pre-order The Infinite Machine here). I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.