Bringing Chainlink Oracles to Cosmos

Bringing Chainlink Oracles to Cosmos We are excited to announce that Kava is actively onboarding Chainlink’s reference price oracles onto the Kava blockchain, making them available to the entire Cosmos ecosystem. Any Cosmos Hub will be able to query the Kava blockchain to obtain a variety of high-quality DeFi data powered by Chainlink’s decentralized oracle network. Useful data sets include prices for cryptocurrency, fiat currency, commodities, interest rates, FX rates, and other important financial information. With over 110+ chains being built on Cosmos, including Binance Chain, OKEx chain, Cosmos Hub, Terra, and many more, the Cosmos DeFi ecosystem is primed to explode in value over the next few years. Through a native integration of Chainlink oracles, Kava becomes the one-stop-shop for Cosmos chains that need DeFi services or data to augment the value of their own financial applications. To better understand the value of the Chainlink Price Reference Data that we are bringing to Cosmos, it is important to understand first what decentralized oracles provide to DeFi applications. What Specifications Create Sound DeFi Oracles? Credential Management Capabilities for Premium Data Providers DeFi is responsible for securing over a billion dollars in USD value, and at least 90% of DeFi applications require market data supplied by an oracle to execute. The reliability of DeFi applications is determined by the financial market data they consume, making data quality standards a prerequisite to success. The ability to produce high-quality financial market data relies on deep industry experience and continual financial incentives from paying customers to maintain. Free APIs cannot provide nearly the same level of price accuracy and reliability. Chainlink is the only oracle solution using external adapters to call data from credentialed APIs. External adapters allow Chainlink nodes to access password protected data, a standard feature of all premium data providers. Chainlink’s widely adopted Price Reference Contracts use external adapters to source prices from respected data aggregator APIs, such as BraveNewCoin which provides data to the Bloomberg Terminal, and Kaiko which services many financial institutions. These data providers are able to maintain market coverage across all the areas where trading volume may shift. Averaging the price data from a few exchange APIs fails to provide adequate market coverage. Other oracle solutions do not have credential management capabilities, meaning they are sourcing data from free APIs, trial plans, or relying on people with little to no experience to curate price data. It is irresponsible to use low-quality data with unpredictable incentive structures around maintaining it to secure millions of dollars worth of financial products. Kava recognizes the importance of data quality and is thus using Chainlink to establish these high data standards throughout the entire Cosmos DeFi ecosystem. Decentralized and Scalable Oracle Security Chainlink is the only oracle network that provides a framework for scalable security. Developers can scale horizontally by adding more node operators to a decentralized oracle network as their need for greater decentralization increases. There are hundreds of people running Chainlink nodes from all over the world that are available across several off-chain listing services. More than 30+ of them contribute to the Chainlink Price Reference Contracts, such as Certus One, Staking Facilities, Chorus One, and many more. Chainlink’s Price Reference Contracts, currently live on the Ethereum mainnet, secure over 30 DeFi price feeds using a collection of multiple independent, Sybil resistant nodes and at least numerous high-quality data sources. Developers can also scale vertically by layering on progressively stronger security guarantees, such as security reviewed node operators, trusted execution environments, Mixicles, and more. All Chainlink nodes supplying data to Kava have been through a rigorous security review process, many of them also make up Kava’s own core node operators. The ability to overlap high-quality node operators with Chainlink greatly reduces the attack surface area of the oracle mechanism relied on by Kava. Kava also plans to explore Chainlink’s Town Crier — TEE-based oracle for TLS verification — for even greater assurances to data’s origin. Crypto-economic Guarantees of Liveness and Data Quality Chainlink is also developing a framework to provide crypto-economic guarantees of liveness and data quality via service level agreements (SLA) and penalty deposits (staking). SLAs are binding on-chain agreements between the consuming smart contract and the node operator that very clearly outline the terms of service, including the expected performance of the node operator and the penalties for failing to deliver on that performance. Staking cryptographically enforces the on-chain service agreements by requiring nodes to deposit collateral in a smart contract, which is either returned or taken in the form of a penalty for not upholding the terms of the SLA. Staking brings additional security and reliability to Kava’s DeFi Hub; nodes are economically punished for being offline during the data service period or for providing outlier data that noticeably deviates from other node operator responses. SLAs are customizable and negotiable between the two parties. Given the Chainlink team’s level of technical expertise and track record of delivering high-quality oracle solutions, we are confident that these upcoming features will bring additional value to Kava and thus the wider Cosmos ecosystem. We did not find the same level of crypto-economic guarantees in other oracle solutions. Creating solid game theory based oracle staking systems is extremely complex and Chainlink is the only project we’ve found that is equipped with a service agreement framework to deliver these cryptoeconomic guarantees properly. Kava Expands Access to Chainlink Oracles Easily Accessible Oracles for Cosmos Kava is the natural hub for DeFi services within Cosmos. Most major blockchains will bridge and connect to Kava for lending, stablecoins, and other DeFi services. With cross-chain infrastructure already built between Kava and other blockchains, it is natural to provide price and market data through the same connections. Faster, More Reliable, and Lower Cost Oracle Data Chainlink oracles on Kava provide superior services due to faster block times with finality and significantly lower transaction fees. This enables Chainlink oracles to post faster price updates, at cheaper rates, and provide a superior experience to DeFi applications and blockchains. This alleviates concerns over gas fees, congestion, and other issues experienced on other networks. Enhanced Security Incentives The overlap of Chainlink node operators and Kava validator nodes increases security and alignment. Chorus One, Cosmostation, P2P, B-Harvest, SNZ, and many other top Chainlink node operators have significant Kava at stake and run Kava validator nodes. This further aligns node operators to behave as good actors on the network and operate in ways that are aligned with the long-term growth of the network. DeFi Applications Need Quality Oracles The reliability of DeFi applications is determined by the financial market data they consume, making data quality standards a critical first step to any serious blockchain project. Understanding this demand, Kava identified early on that there wasn’t a sound oracle solution within Cosmos to serve its lending platform, nor the 110+ Cosmos projects thirsty for data. Understanding the Data Problem Blockchains are designed to make true and false determinations based on data that is already stored on the blockchain (on-chain) yet interest rates, prices, and event outcomes are datasets that originate outside of any native blockchain (off-chain) and vary in format and sources. Because there’s such a variety of data out there — both structured and unstructured — it’s incredibly difficult for any blockchain to make reliable determinations on the array of colorful data without sacrificing security. Given the realities of modern data problems, it goes without being said that if DeFi projects within the Cosmos ecosystem choose the wrong oracle provider they won’t have reliable data — which can lead to catastrophic results. No matter if it is sending payments, fulfilling a contract, or simply having market data to determine liquidation prices, it is having sound reliable data that ultimately secures DeFi applications. Kava foresaw security risks for Cosmos DeFi applications resulting from poor oracles selections, some of which include users’ funds being permanently lost, systems halted or manipulated all together. Any of these is instant death for a budding crypto project in terms of credibility, reputation, and trust with end-users. Advancing DeFi Development in Cosmos As the trusted DeFi provider to the Cosmos ecosystem, Kava has the responsibility to deliver a high quality DeFi platform, seeded with the best possible data and overall security, to other blockchains and applications within Cosmos. While other oracle solutions may be developing on Cosmos, we haven’t seen them taking a serious approach to data quality, game theoretically proven crypto-economic guarantees and even basic functionality like using premium credentialed APIs. When users’ money is on the line, premium data quality is required. Any serious project building a decentralized financial application must have data from premium credentialed data sources and oracle infrastructure that is both decentralized and scalable or they risk critical issues with their DeFi applications. Furthermore, only the crypto-economic guarantees that Chainlink can provide around liveness and data quality can help ensure that the data does not get used as a point of attack in DeFi applications. For these reasons, after much research and diligence, Kava has selected Chainlink as the only oracle solution that meets our security and data quality requirements for both Kava’s lending platform and the Cosmos ecosystem. Because of Kava’s unique scalability properties, bringing Chainlink oracles into that ecosystem allows an increase in the ability to generate more frequent price updates, greater resiliency to congestion on Ethereum, and therefore reduces data costs, while extending Chainlink’s reach to the 110+ projects within Cosmos valued at over $3.8B. Thanks to our collaboration with Chainlink,, high quality price reference data will soon be available to the entire Cosmos ecosystem and serious DeFi applications can finally have a reliable price data solution they can count on. About Kava: Kava is a multi-asset DeFi platform that offers stablecoins, loans, and other financial services for users of major cryptocurrency assets including BTC, XRP, BNB and ATOM to name a few. The Kava platform has two types of tokens, the KAVA token and the USDX stablecoin where the KAVA token is the native token of the Kava blockchain integral in the security, governance, and mechanical functions of the platform. Users can collateralize their crypto assets in exchange for Kava’s stablecoin, USDX. Kava’s stablecoin provides a high interest yield earning users more than they would with a traditional cash or savings account at a bank, but unlike traditional savings accounts. Website l Whitepaper l Telegram l Medium l Twitter About Chainlink If you’re a developer and want to connect your smart contract to existing data and infrastructure outside the underlying blockchain, reach out to Chainlink here. They can help you quickly and securely launch your data-enabled application or Chainlink Price Reference Data Contract on mainnet today. Learn more by visiting the Chainlink website, developer documentation or following them on Twitter or Reddit. You can also join the technical discussion on Discord. Chainlink is a decentralized oracle network that enables smart contracts to securely access off-chain data feeds, web APIs, and traditional bank payments. It is well known for providing highly secure and reliable oracles to large enterprises (Google, Oracle, and SWIFT) and leading smart contract development teams such as Polkadot/Substrate, Synthetix, Loopring, Aave, OpenLaw, Conflux, and many others.