Chainlink And Synthetix Enter Into New DeFi Partnership

The world of decentralized finance is all over the crypto news today and this month. In another breakthrough for the DeFi technology, we can see that Chainlink and Synthetix partner up – announcing their official cooperation in a blog post.

For those of you who don’t know, Synthetix is better known as the second largest DeFi application in the Ethereum ecosystem – which is now poised to use Chainlink’s oracles to avoid relying on centralized price feeds in the future.

As the second largest DeFi application in the ETH ecosystem, Synthetix has been using Chainlink’s technology for a couple of days now. A blog post showed that this partnership could be a breakthrough for the Decentralized Finance (DeFi) movement in the Ethereum ecosystem as Synthetix will no longer have to rely on centralized price feeds in the future.

Aside form the Chainlink and Synthetix partnership, data from DeFi Pulse  shows that the latter is currently the second largest application in the ETH ecosystem after Maker (MKR) with 353,000 ETH locked in smart contracts. The platform creates synthetic on-chain investments known as “Synths” and ERC20 tokens that replicate the value of investments such as stocks. Users can buy these tokens and invest in stocks or commodities in the form of an ERC20 token.

Until now, Synthetix has had to rely on centralized data providers to determine the price. In July 2018, this led to so-called frontrunning bots manipulating the feed and capturing billions of dollars.

The new partnership between Chainlink and Synthetix echoed in the ETH news as one of the most important milestones in the project history so far, according to the founder of Synthetix Karen Warwick.

“Given our reliance on regular price feeds for our derivatives trading mechanism, finding a robust decentralized oracle solution has always been at the top of our priority list. Chainlink delivers the solution, deployed by an excellent team and supported by an invaluable community,” Warwick explained.

To ensure complete decentralization, Chainlink and Synthetix will work with numerous independent nodes. Each of them has undergone a security audit and has a proven track record.

The first iteration will see seven different assets linked to fiat. Once they are proven to work successfully with Chainlink’s inputs, Chainlink and Synthetix will attempt to integrate additioal assets including cryptocurrencies and indices.