Coinbase Launches New Price Oracle, Competing With Chainlink

The altcoin news and rumors today show that Coinbase launches new price oracle for BTC/USD and ETH/USD pairs, where developers and DeFi apps can make use of this price data. However, this new price oracle is also a direct competitor to Chainlink as well as other oracle providers.

If you read our previous analysis on Chainlink (LINK), you probably know that this is one of the best performing coins of the year, with more than 100% in gains only in 2020. However, the main technology behind this token lies in its blockchain oracle, which provides data in a way that is useful for DeFi applications and other blockchain services.

Now, Coinbase is competing with LINK with this new service that will sign all oracle data with its private key. So, anyone can use this data on-chain and verify that data by checking it against Coinbase’s public key, as per the official announcement.

As Coinbase launches new price oracle, the service is meant to send new data from the Coinbase Pro exchange every minute, ensuring that the price data is always up-to-date. In practice, deveopers can use this data in any sort of blockchain service which manages funds in an automatic way. For instance, oracles are useful in loan services which liquidate debt positions and algorithmic stablecoins which automatically manage their collateral.

If you are wondering who can use this platform, the Coinbase news show that anyone can use the oracles immediately and a few projects have already expressed support for this project. One of them is Compound, a crypto interest platform, which said that it will use Coinbase’s oracle to “increase the security and decentralization of [its] price feed.”

Additionally, reports show that the derivatives platform dYdX has also endorsed the product. The CEO, Antonio Juliano, notes that the oracles are used in “every lending & derivatives protocol” and also mentions that Coinbase is “the most trusted and secure institution” in the crypto industry.

Right now, the news suggest that this is a good move for Coinbase, but the exchange will likely face plenty of competition from other oracles. Currently, Chainlink is the most recognizable blockchain oracle provider, boasting over 25 trading pairs and having partnerships with high-profile blockchain companies such as Celsius and Brave New Coin.