Coinbase Exchange introduced Bitcoin and Ethereum price oracles for DeFi services

The largest American cryptocurrency exchange Coinbase Pro will make flow information available through its APIcryptocurrency quotes for decentralized finance (DeFi) protocols. This is stated in the blog of the company.

DeFi ecosystem has evolved over the past two yearsrapidly and shortly after the March fall, the value of funds blocked in applications again exceeded the milestone of $ 1 billion.

Many of these protocols exist.Dependence on reliable price channels, known as oracles, which must report asset prices for the protocol to function. These prices are used, among other things, to create new derivatives, algorithmic stablecoins or to eliminate debt positions.

There are two main approaches toMake asset prices available to DeFi: Publish signed price data from an off-line source, such as an exchange, or use prices from algorithmic decentralized exchanges, such as Uniswap or Kyber.

Both methods are not without drawbacks. Using data from an external source requires trust in the publisher in order to publish the right prices and keep the signature key safe. Similarly, relying on DEX-generated intranet channels, protocols are exposed to various new attack vectors that have yet to be fully explored.

A case in point was the attack on the bzx DeFi platform, in which attackers, manipulating the oracle, brought 2388 ETH ($ 645 thousand).

Trustworthy price channel in a secureCoinbase’s infrastructure is able to bring the required level of security to the DeFi ecosystem, reduce systemic risks and give impetus to a new wave of adoption of decentralized finance services.

The oracle of Coinbase will allow anyone to publish BTC-USD and ETH-USD quotes on the blockchain. Data is streamed from the Coinbase Pro API with a one-minute update.

The authenticity of stock quotes is confirmedthe public and private key of the oracle of Coinbase. It is also capable of detecting and rejecting suspicious values ​​that will not correspond to the expected volatility in the trading pair.

“Coinbase oracles will increase security anddecentralization of Compound quotes flow. The rest of the De-Fi space will also be able to take advantage of accelerated development, holistic data and common standards.— Compound head Robert Leshner commented on the innovation.

DYdX Service CEO AntonioGiuliano recognized the Coinbase oracles as reliable and secure, and believes that they can form the basis of more decentralized price oracles for the ecosystem.

Oracles can collect not only market data,but also data from trusted sources such as the World Health Organization. The Gnosis team recently announced the launch of a new prediction market platform dedicated to the COVID-19 coronavirus pandemic-related events where oracles have found use.