Decentralized Finance is now flourishing more than ever, but developers still face one problem that affects users the most. Updating their documentation, decentralized oracle provider Chainlink published a guide on how to request and receive API data for smart contracts. If it gathers enough attention, we could potentially see developers migrating to Chainlink and their price feeds.
Lately, oracles have been a focal point of DeFi platforms as certain projects failed to gather accurate and stable prices on cryptocurrency prices.
For example, a bug caused the DAI stablecoin to surge 30% on Coinbase in an extremely short period. Compound, a lending & borrowing protocol, only used one source of data for fetching DAI prices: the Coinbase exchange.
As a result, Compound has quickly liquidated users who had loans at the time with limited collateral. This event is considered to be extremely troublesome, considering that stablecoin loans should be the most stable ones. In this case, users have lost funds due to the fault of the platform that they are using, and not themselves.
Since the aforementioned event, Chainlink sparked discussions that focused on the importance of oracle flexibility. To ensure maximum price accuracy, reliability, and stability, developers have to set and maintain numerous sources of data.
Therefore, one should use more than one decentralized oracle when providing a DeFi service or product. Accordingly, events like the DAI liquidation cascade can never happen.
The team has decided to help developers onboard to their platform and use their API-based oracle feeds by publishing a new guide. On their official website, Chainlink wrote a complete guide on the use of external API and how to connect them with smart contracts.
In fact, the guide explains every single step of the process, which should considerably help developers with implementing decentralized oracles on their protocols.
Chainlink launches Builders Program to reward developers
This is not the first time this month that Chainlink has placed a keen focus on developers. On December 3, the project announced the Chainlink Builders Program. Essentially, the program rewards developers for continuing their hard work in the DeFi sector.
Users with technical knowledge who BUIDL can earn badges based on the amount of work that they have done. There are currently 3 levels of badges that developers can apply for, with each tier offering better rewards. Those who are eligible for the badges can redeem them for NFTs, community-based rewards, and Chainlink merchandise.
The project rewards a majority of these badges to developers who have actively participated in the Chainlink community. This includes joining the Chainlink hackathon, building testnet smart contracts, answering questions on the platform’s social channels, and many other activities.
The highest level rewards those who have built amazing products and services. For example, one requirement is to build a DeFi protocol using Chainlink with at least $1 million TVL. Per the announcement, the team plans to add additional tiers and challenges which the community can complete.
With incentives to participate in DeFi and help the ecosystem, we will surely see a surge of activity. Moreover, the builders program might also help onboard developers from other platforms to Chainlink.