We’re excited to announce that JulSwap will be upgrading its oracle mechanism to the industry-leading Chainlink Price Feeds to provide the most robust protection of user funds against any future flash loan-based price manipulation attempts. Our decision comes after careful analysis of the previous attack, which we determined was the result of a flash loan attack used to produce an inaccurate exchange rate.
The Chainlink upgrade will be deployed across the following USD-paired markets: BUSD, ETH, BTC, BNB, and DOGE. Additionally, as JULd becomes more liquid across more trading markets, Chainlink Price Feeds can be launched for these assets to enhance the security of user funds within JulSwap v2 yield pools.
We selected Chainlink Price Feeds because they have proven over an extensive period of time to be immune to flash loan manipulation, protecting user funds in notable DeFi projects like AAVE, Synthetix, and Venus. Chainlink Price Feeds supply the volume-weighted, global price of crypto assets, which is aggregated from many premium data providers and takes into account the trading activity of all centralized and decentralized exchanges. Compared to on-chain DEX price oracles, Chainlink’s decentralized approach to market coverage mitigates the issue of market manipulation on a single or handful of exchanges, ensuring the data delivered on-chain reflects the true market-wide price.
Securing the JulSwap v2 Ecosystem With Chainlink
JulSwap is a high-speed and low-cost decentralized exchange (DEX) on Binance Smart Chain. In addition to our existing DEX offering, JulSwap also features numerous other products such as yield farms, where users can stake their DEX liquidity pool shares and earn additional yield upwards of over 200% APY. With the recent announcement of V2, JulSwap will provide greater functionality in order to boost the growth and adoption of the BSC ecosystem as a whole.
In order to scale the security guarantees of V2 and prevent future flash loan price manipulation, we are in the process of integrating the Chainlink’s decentralized price oracles. Chainlink Price Feeds are already widely used and actively secure tens of billions of dollars for numerous DeFi protocols across both the Ethereum and BSC ecosystems. Some of the key benefits of Chainlink Price Feeds include:
- High-Quality Data — Chainlink Price Feeds source data from numerous premium data aggregators, generating financial market data that’s aggregated from hundreds of exchanges, weighted by volume, and cleaned from outliers and wash trading. Chainlink’s data aggregation generates accurate global market prices that are resistant to API downtime, flash crash outliers, and data manipulation attacks like flash loans.
- Secure Node Operators — Chainlink Price Feeds are secured by independent, security-reviewed, and Sybil-resistant oracle nodes run by leading blockchain DevOps teams, data providers, and traditional enterprises. These Chainlink nodes have a strong track record for reliability, even during high gas prices and infrastructure outages.
- Decentralized Infrastructure — Chainlink Price Feeds are decentralized at the data source, oracle node, and oracle network levels, generating strong protections against downtime and tampering by either the data provider or oracle network.
- Reputation and Transparency — Chainlink provides a robust reputation framework and set of on-chain monitoring tools that allow users to independently verify the historical performance of node operators and oracle networks, as well as check the real-time prices being offered.
Another key benefit of Chainlink Price Feeds is that they fetch data from multiple off-chain data aggregators, generate a median value, and then regularly push updates on-chain in an asynchronous manner (occurs over more than one block). However, data queries from on-chain smart contracts for the latest update remain fully synchronous (occurs in a single transaction) to maintain composability. As a result, the JulSwap V2 protocol can receive volume-weighted, global pricing of various crypto assets at any point in time, while ensuring flash loans have zero effect over the data being consumed.
In the end, on-chain liquidity pools do not make for accurate, tamper-proof price oracles due to their vulnerabilities around flash loan manipulation, low market coverage, and sometimes stale price updates. This issue becomes more apparent for lower-liquidity assets, whose market price can be shifted with lower amounts of capital. As the JulSwap V2 and wider DeFi ecosystem grows, using a highly secure and reliable price oracle like Chainlink is a must. We plan to continue leveraging Chainlink for all sufficiently liquid assets available on JulSwap V2 and encourage other BSC projects to do the same.
Chainlink is the industry standard oracle network for powering hybrid smart contracts. Chainlink Decentralized Oracle Networks provide developers with the largest collection of high-quality data sources and secure off-chain computations to expand the capabilities of smart contracts on any blockchain. Managed by a global, decentralized community, Chainlink currently secures billions of dollars in value for smart contracts across decentralized finance (DeFi), insurance, gaming, and other major industries.
Chainlink is trusted by hundreds of organizations, from global enterprises to projects at the forefront of the blockchain economy, to deliver definitive truth via secure, reliable oracle networks. To learn more about Chainlink, visit chain.link, subscribe to the Chainlink newsletter, and follow @chainlink on Twitter. To understand the full vision of the Chainlink Network, read the Chainlink 2.0 whitepaper.