Bao Finance Has Integrated Chainlink Price Feeds To Help Secure Synthetic Assets

We’re excited to announce that Bao Finance — a synthetics protocol that enables anyone to build tokens pegged to any numerical data feed — has integrated Chainlink Price Feeds on Ethereum mainnet. By integrating the industry-leading decentralized oracle network, Bao Finance now has access to high-quality, tamper-proof price feeds needed to create secure synthetic assets that reliably flag at-risk collateral for liquidations. This will provide our users with stronger assurances that the protocol will remain solvent and that the data used for synthetic token prices is not possible to manipulate.

Our initial integration involves the use of ETH and USDC-based feeds for collateral on Bao Markets. A corresponding Chainlink Price Feed is also a requirement for tokens included in a Bao Basket, as high-quality price data is needed to reliably use any asset as collateral on Bao Markets. Our first Bao Basket, bSTBL uses USDC, DAI, and RAI based price feeds to calculate its Net Asset Value.

Bao Baskets are an easy way to gain yield-bearing, rebalancing exposure to crypto on the Ethereum network. Our first basket, bSTBL, represents ownership of an equal split of USDC, DAI, and RAI, which is deposited into other protocols to earn yield. In the future, we plan to implement novel functionality that enables users to create their own baskets with custom yield farming and rebalancing strategies.

Bao Markets help users mint synthetic tokens backed by Bao Baskets and other approved collaterals. The first synthetic token on our platform, baoUSD, is already available. It enables users to keep exposure to their preferred digital assets by locking them as collateral and receiving baoUSD to be spent however they choose. However, users must keep in mind Bao Finance’s collateral requirements, or they may be at risk of liquidation.

We chose Chainlink as our go-to oracle solution because its infrastructure is seamless to integrate and time-tested in production. Chainlink already helps secure leading DeFi protocols responsible for tens of billions of dollars in smart contract value, maintaining robust security and high availability even amidst unexpected events, such as exchange downtime, flash crashes, and data manipulation attacks via flash loans.

To help secure our synthetic asset protocol, we needed access to fresh asset prices that are supplied directly on-chain in a highly reliable manner. Fair market asset prices should reflect a volume-weighted average from all trading environments. Thus, we needed to make use of an oracle network to fetch aggregated price data off-chain and deliver it on-chain to be consumed by our application.

After reviewing various oracle solutions, we integrated Chainlink Price Feeds because they provide a multitude of critical features such as:

• High-Quality Data — Chainlink Price Feeds source data from numerous premium data aggregators, leading to price data aggregated from hundreds of exchanges, weighted by volume, and cleaned of outliers and wash trading. Chainlink’s data aggregation model generates more precise global market prices that are inherently resistant to inaccuracies or manipulation of any single or small set of exchanges.
• 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. Chainlink nodes have a strong track record of reliability, even during high gas prices and infrastructure outages.
• Decentralized Network — 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 System — Chainlink provides a robust reputation framework and set of on-chain monitoring tools that allow users to independently verify node operators’ historical and real-time performance and oracle networks.

In the future, we expect to continue to integrate many more Chainlink Price Feeds as we expand to new EVM chains and enable the creation of new synthetic tokens.

About Chainlink

Chainlink is the industry standard for building, accessing, and selling oracle services needed to power hybrid smart contracts on any blockchain. Chainlink oracle networks provide smart contracts with a way to reliably connect to any external API and leverage secure off-chain computations for enabling feature-rich applications. Chainlink currently secures tens of billions of dollars across DeFi, insurance, gaming, and other major industries, and offers global enterprises and leading data providers a universal gateway to all blockchains.

Learn more about Chainlink by visiting chain.link or reading the developer documentation at docs.chain.link. To discuss an integration, reach out to an expert.

About Bao Finance

Bao Finance is a dao-governed project completely run by its community. Our vision is to allow the creation of accurate, consumable data streams in the form of synthetics, to move the power of information from institutions to individuals.

We are building a platform so anyone can create synthetic tokens that represent any kind of data. Synthetics will be backed by liquidity to ensure their accuracy, making the most accurate data the most highly valued. This new, open financial data stream, will enable the creation of novel markets and DeFi projects.

You can learn more about Bao by visiting bao.finance, reading the documentation at docs.bao.finance, or by coming to our discord server and asking questions