KyberSwap and Chainlink are working together to help secure the DeFi ecosystem with highly reliable infrastructure and trust-minimized services
In support of our continued efforts to pioneer the DeFi ecosystem, KyberSwap — a multi-chain DEX aggregator and liquidity platform — has integrated Chainlink Price Feeds on Arbitrum, Avalanche, BNB Chain, Ethereum, Optimism, and Polygon.
By leveraging the industry-leading decentralized oracle network, we’re able to seamlessly convert collected fees to KNC tokens at globally accurate fair market rates. This helps us to distribute rewards to KyberDAO participants more transparently and reliably. Chainlink Price Feeds also help us to support KNC as collateral on DeFi lending platforms.
In this article, we explore how KyberSwap and Chainlink are working together to help secure the DeFi ecosystem with highly reliable infrastructure and trust-minimized services.
Chainlink Underpins DeFi
Oracles provide a bridge between the real world and on-chain smart contracts, and Chainlink is the most widely adopted oracle network in the blockchain space.
The Chainlink Network plays a critical role in enabling the full potential of smart contract utility with its suite of trust-minimized services. DeFi platforms like KyberDAO, AAVE, and Synthetix use Chainlink Data Feeds to obtain accurate real-time asset prices in their smart contracts, ensuring the most accurate market rate when making a swap or during collateral liquidation.
Moreover, Chainlink provides the largest collection of reliable on-chain price reference data for DeFi and secures tens of billions of dollars within the DeFi ecosystem by connecting hybrid smart contracts with high-quality data and off-chain computation. In fact, Chainlink is well-known for securing tens of billions of dollars for leading smart contract applications across various blockchains.
KyberSwap Empowers DeFi
KyberSwap has developed a wide range of advanced features to support a myriad of users throughout the DeFi ecosystem. Let’s explore how KyberSwap empowers traders, LPs, and developers.
1. For Traders
- Best swap rates through DEX aggregation, while letting you identify other tokens even before they trend via on-chain metrics
- Facilitated over $10 Billion in trading volume
2. For Liquidity Providers
- Concentrated liquidity for many different token pairs, stables, and non-stables
- Auto-compounded LP fees
- Bonus liquidity incentives through yield farming
- Sniping/Just-in-time attack protection to protect the rewards for LPs
3. For Developers
- dApps can integrate with KyberSwap’s token pools and aggregation API to provide the best rates for their users, saving time and resources
Chainlink x KyberSwap
Chainlink Price Feeds deliver highly secure, reliable, and decentralized price data on-chain, which is used by a wide array of applications. Here’s how KyberSwap is using Chainlink Price Feeds:
1. Chainlink provides KNC price data to DeFi lending platforms
Chainlink supplies on-chain price data on the KNC token across the multi-chain ecosystem. KNC/USD and KNC/ETH Chainlink Price Feeds are currently live on Arbitrum, Avalanche, BNB Chain, Ethereum, Optimism, and Polygon!
This enables lending platforms to now easily support KNC as a collateral type. For instance, lending protocols like QiDAO, Benqi, and Aave calculate the accurate price of KNC whenever a user lends KNC or borrows funds with KNC as collateral. This is especially important during KNC collateral liquidation and enhances the reliability of lending platforms.
2. KyberDAO is using the KNC/USD and KNC/ETH Price Feeds
KyberDAO allows KNC token holders to participate in governance by staking their tokens to vote on proposals. In return, voters receive rewards from fees generated on KyberSwap through trading activities. These fees are converted to KNC rewards before being distributed to voters.
Along with using KNC-paired Chainlink Price Feeds, KyberDAO is using Price Feeds to get market data on other assets such as ETH and WBTC during the process of converting collected trading fees to KNC, helping ensure that voters get their fair share of rewards.
We chose to integrate Chainlink Price Feeds to benefit from features such as:
- High-Quality Data — Chainlink Price Feeds source data from numerous premium data aggregators, leading to price data that’s aggregated from hundreds of exchanges, weighted by volume, and cleaned of outliers and wash trading. Chainlink’s data aggregation model generates more precise global market prices that are inherently resistant to inaccuracies or manipulation of any single or small set of exchanges.
- Secure Node Operators — Chainlink Price Feeds are secured by independent, security-reviewed, and Sybil-resistant oracle nodes run by leading blockchain DevOps teams, data providers, and traditional enterprises. Chainlink nodes have a strong track record of reliability, even during high gas prices and infrastructure outages.
- Decentralized Network — Chainlink Price Feeds are decentralized at the data source, oracle node, and oracle network levels, generating strong protections against downtime and tampering by either the data provider or the oracle network.
- Reputation System — Chainlink provides a robust reputation framework and set of on-chain monitoring tools that allow users to independently verify the historical and real-time performance of node operators and oracle networks.
3. Kyber is running a Chainlink node to help secure their oracle network
Kyber is also operating a Chainlink node to provide pricing data for KNC and other tokens and help secure the Chainlink oracle network.
“Chainlink Price Feeds underpin the DeFi economy with highly secure, reliable, and decentralized market data, including on KyberDAO where they facilitate our distribution of rewards. We’re excited to continue our use of Chainlink to support developers, traders, and liquidity providers across the multi-chain DeFi ecosystem.” — Victor Tran, CEO and Co-Founder of Kyber Network
Chainlink is the industry standard for building, accessing, and selling oracle services needed to power hybrid smart contracts on any blockchain. Chainlink oracle networks provide smart contracts with a way to reliably connect to any external API and leverage secure off-chain computations for enabling feature-rich applications. Chainlink currently secures tens of billions of dollars across DeFi, insurance, gaming, and other major industries, and offers global enterprises and leading data providers a universal gateway to all blockchains.