In the legacy world of centralized finance (CeFi), people hand control of their assets over to trusted third-parties like centralized banks and institutions. In the developed world, these brand- or paper-based promises are generally upheld, but as last spring’s Robinhood fiasco revealed, they’re much less reliable than most people think.
Blockchain technology offers an alternative in decentralized finance (DeFi), wherein subjective third-parties are replaced by smart contracts that execute according to math and physics. Though CeFi and DeFi may seem mutually exclusive, they’re often mutually beneficial – and technology enabling interoperability, such as Chainlink’s secure middleware, is accelerating DeFi’s mainstream adoption by onboarding more users from legacy finance.
Hybrid “CeDiFi” platforms endeavor to offer the best of both worlds by reinforcing corporate responsibility with cryptographic guarantees. YouHodler is one such fintech platform introducing innovative DeFi products into the familiar framework of traditional finance. To “further its vision of a hybrid CeDeFi platform” that’s transparent, auditable and easy-to-use, YouHodler integrated Chainlink Price Feeds to boost the reliability of vital functions like issuing new loans and liquidating undercollateralized loans.
“We believe that blockchain is not a revolution, but a logical evolutionary step in the development of the financial industry,” YouHodler CEO Ilya Volkov told Chainlink Today. This is why YouHodler is aimed at delivering cryptocurrency and the ability to earn high yield through DeFi into the existing financial world. In an official announcement, Volkov called integrating Chainlink Price Feeds “a key step” in creating “a superior synergistic solution to the benefit of users.”
By using Chainlink to access high-quality decentralized exchange rates on numerous cryptocurrency price pairs, Volkov said YouHodler boosts the transparency and reliability of the backend pricing mechanisms referenced by its crypto-focused lending product. “Our aim is to have the industry’s best market price feeds on the platform,” he told Chainlink Today. “With Chainlink’s solution, we increase the stability of the platform, while reducing its lagging and the number of ‘off the market quote’ spike cases.”
Beyond the benefits of integrating Chainlink’s industry-standard oracle framework, Volkov said becoming a part of Chainlink’s “awesome” community is the icing on the cake. “We were always impressed by the power and energy of the Chainlink ecosystem and community. It’s great to join other DLT companies utilizing Chainlink’s technology.”