Sunday, January 17, 2021

bZx Integrates Chainlink’s Decentralized Oracle Solution to Prevent Future Price Exploits

bZx, a financial primitive that enables shorting and lending has recently integrated Chainlink, a decentralized oracle network that enables smart contracts to securely access off-chain data feeds, as a decentralized oracle solution to prevent future price exploits.

According to the report, bZx is working closely with the Chainlink team to identify vulnerabilities of its protocol and integrate superior solutions to foster the overall security of its system.

This measure is particularly put in place to prevent the repeat of the price oracle attack that played out on 18th February 2020, whereby a user used a flash loan to manipulate an illiquid on-chain oracle far beyond the true market price to leverage bZx margin position.

After this unfortunate incident, bZx discussed and weighed different options and decided to adopt Chainlink’s decentralized oracle networks as soon as possible, as the basis for its new price oracles over the long term.

What Chainlink Decentralized Oracle Solution Brings to bZx

By adopting Chainlink’s oracle solution, all bZx’s critical feeds are secured by several independent nodes that collectively source data from more than seven independent data aggregators.

This allows bZx price oracles to have great exposure to true market-wide price discovery from top discovery sources and brings in more solid security barriers.

In this regard, any attack vector that can be easily exploited by vastly increasing the amount of capital and multi-party coordination needed for any further attacks will be eliminated.

To bring about a better understanding of the advantages of this new oracle model, bZx has outlined the security concerns around the use of on-chain oracles.

The reason why adopting Chainlink’s decentralized oracle solution will bring critical security back to bZx and ultimately re-establish market-wide trust has also been discussed.

All DeFi protocols are prone to such oracle attacks, which makes the latest attack serves as an important case study on how to improve the security of the entire ecosystem. However, this does not stop the push for trustworthy decentralized finance.

The Founder and CEO of bZx, Tom Bean shared his excitement in working with Chainlink for a long-lasting solution. Read his statement below:

“We’re excited to work with the experienced and technically sound team developing on Chainlink to mitigate any future oracle attacks on bZx. Chainlink’s decentralized oracle networks greatly increase the accuracy of our critical price oracles by deriving them from an aggregation of the top liquidity sources.

This gives us market-wide exposure to price movements while retaining the highest-security standards thanks to extending the security guarantees of our underlying smart contracts to include a secure, decentralized oracle mechanism.

We’re confident that incorporating Chainlink will harden the security of critical bZx functions that are dependent on accurate price feeds, ultimately reestablishing bZx as a trusted protocol within the greater DeFi ecosystem.”

Solomon Odunayo
Solomon has a growing passion for writing, this propelled him to keenly work on Eagles News Media for about two years before delving into the cryptocurrency and Blockchain industry he finds more interesting. He worked as a crypto Journalist and Editor at NewsLogical before joining Herald Sheets, owing to the priceless experience he has accumulated since he became a contributor in the crypto community.

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest Articles