Oracle use case: Chainlink launches price data for 25 trading pairs

The cryptocurrency project Chainlink, which focuses on implementing Oracle use cases, recently announced on its blog that it will provide price data for over 25 trading pairs to help enhance the Ethereum DeFi ecosystem.

• Decentralized data sources for price accuracy
• High-quality on-chain data driving DeFi ecosystem growth

One way blockchain acquires off-chain market information is through Oracles. However, on-chain data aggregation costs are high, especially as most projects require consistent on-chain prices to keep up with market price fluctuations. Chainlink's decentralized Oracle network meets this demand.

Chainlink currently provides price references for 16 Ethereum trading pairs and 9 USD trading pairs. Three websites have already integrated their data, including decentralized exchange Synthetix, Loopring, and lending platform Aave.

How does it work?

Unlike traditional crypto data platforms such as CoinMarketCap and Coingecko, Chainlink does not collect price data from exchanges but obtains it from independent nodes.

Chainlink's decentralized Oracle network is composed of nodes that undergo security audits, are resistant to Sybil Attacks, and are completely independent. These nodes are run by blockchain security teams, many of which have extensive experience in running consensus mechanism nodes.

Each time a request is made to update on-chain prices, each node is responsible for detecting, aggregating data off-chain, and updating on-chain with the average price. Nodes also retrieve prices from platforms like CoinMarketCap and CoinGecko via their APIs to maintain data quality.

Questioning the Authenticity of Coinmarketcap Data

A report by asset management company Bitwise on March 22nd pointed out that 95% of trading volume from unregulated exchanges is suspected of being falsified, citing Coinmarketcap data containing a significant amount of suspicious data, thus presenting a misleading picture of the market's true size.

Subsequently, Coinmarketcap has continued to expand its Data Accountability & Transparency Alliance (DATA) to solidify its market position.

However, to date, there are still unknown exchanges ranking high in trading volume on the Coinmarketcap platform, raising doubts about the authenticity of its data.

Further Reading

• CoinMarketCap announces updated market ranking standards
• Yahoo Finance collaborates with CoinMarketCap to integrate cryptocurrency news information

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