As the blockchain industry’s leading oracle network, Chainlink forms the backbone of decentralized finance (DeFi) by securing tens of billions of dollars in smart contracts. Hundreds of DeFi protocols in the Chainlink ecosystem rely on Chainlink Price Feeds to provide accurate market prices, which are vital to borrowing and lending assets against collateral.
Interest Protocol (IP), developed by GFX Labs, is a new borrowing and lending protocol designed to be highly capital-efficient by combining traditional banking’s fractional reserve system with the safety of over-collateralized loans. IP users post wETH, wBTC, and UNI as collateral to borrow the protocol’s over-collateralized stablecoin, USDi, while lenders earn higher interest rates without banks as middlemen. This week, IP launched on Ethereum with Chainlink Price Feeds as the primary oracle in its unique circuit breaker oracle configuration.
Interest Protocol co-founder Getty Hill told Chainlink Today that Chainlink’s track record for maintaining security and availability even during extreme market volatility and unpredictable events like exchange downtime and flash loan attacks is why IP chose Chainlink as the primary oracle in its multi-oracle system designed to optimize the protocol’s accuracy and safety.
“The nature of DeFi is to reduce single points of failure,” Hill said. “We’ve made a straightforward improvement by adding a sanity check for each price update that gives users peace of mind that we have some redundancy built in.”
Hill, who has worked on protocol governance at Compound Finance and Uniswap, said he hopes Interest Protocol serves as a good example for other DeFi protocols that want to integrate Chainlink as the main oracle in a diverse oracle framework.
“Personally, I’ve had the chance to get to know the Chainlink team and protocol quite well over the last year when I led the effort to update the oracle system at Compound and integrate Chainlink as the primary oracle provider,” he said. “It is nice to know we have the Chainlink team and community on our side and that we’re all working towards a safer and more efficient DeFi.”