Avalanche’s novel consensus mechanism and near-instant transaction finality has turned the open-source platform into one of the fastest organically growing blockchain ecosystems. Last month, Avalanche integrated Chainlink Price Feeds to supercharge DeFi development by unlocking key functionalities needed to build the next generation of DeFi applications.
Director of Communications at Ava Labs (a team supporting the development of Avalanche) Patrick Sutton said the integration marked a monumental shift for over 225 projects building in the Avalanche ecosystem, including non-custodial algorithmic liquidity market protocol BENQI, which chose to launch on Avalanche first. In an official statement, BENQI’s Co-founder, Dexter Lee, called the integration a “watershed moment” that will “spark the explosion of DeFi activity” on the Avalanche network.
BENQI, the first liquidity market protocol on Avalanche, announced in May that it would integrate Chainlink’s oracles as a “critical piece of infrastructure” to ensure the safety of its protocol, which relies on the over-collateralization of assets. Hansen Niu, who leads strategy at BENQI, told Chainlink Today that Chainlink’s oracles are required to supply accurate and up-to-date price data to BENQI’s smart contracts when calculating lending and borrowing rates.
“Liquidation thresholds on the protocol also require price feeds, and it is important to us that users of the protocol do not get unfairly liquidated due to anomalies of price data. Having tamper-proof price feeds from Chainlink relieves us of those worries,” he said.
BENQI is designed to let users easily lend, borrow and earn interest with their digital assets. By launching on Avalanche with Chainlink’s oracles, Niu said BENQI has established ease-of-use and security as its top priorities. “BENQI provides new and old DeFi users an environment that’s economically viable to transact in, without sacrificing security or decentralization,” he said.
Niu echoed Lee’s belief that integrating Chainlink Price Feeds was a significant leap for Avalanche. “Chainlink Price Feeds unlock a new range of financial primitives that were previously not possible, especially on a nascent network like Avalanche,” Niu said. “It is a privilege to be able to integrate Chainlink into the BENQI protocol from Day One.”
Niu said BENQI’s near-term goal is to onboard both experienced DeFi users and “DeFi-curious” users as the go-to platform for unlocking capital and generating greater capital efficiency in the Avalanche ecosystem. “We believe in the technological advancement of Avalanche in helping us get there,” he said. “The future is bright for both BENQI and DeFi.”