Dolomite Integrates Chainlink Automation to Help Secure Price Updates for ERC-4626 Vaults
We’re excited to announce that Dolomite — a next-generation money market protocol and DEX — has integrated Chainlink Automation on Arbitrum mainnet to help secure price updates for ERC-4626 Vaults integrated into Dolomite, such as plvGLP, jUSDC, and mGLP. This integration helps strengthen the security of the protocol for users borrowing against vault assets by providing clear conditions for when, and in what conditions, to update asset prices.
Aimed at making integrations across the DeFi ecosystem easier, faster, and more secure, ERC-4626 provides a standard API for tokenized yield-bearing vaults. Dolomite integrates these vault assets, which by themselves offer varying forms of yield, to offer users the ability to borrow against them to unlock liquidity. A key competitive advantage for Dolomite is its ability to support a wide variety of digital assets for borrowing and lending. From long-tail assets to assets with unique considerations, Dolomite’s modular architecture unlocks custom lending markets that account for a wide range of unique asset structures.
Given its wide breadth of assets, Dolomite maintains a variety of risk mitigation tactics for different assets. Many assets are unique, and a security-first design that can mitigate risk for any asset is mission-critical for Dolomite to securely unlock new markets. Vault assets in particular have numerous pricing considerations (which are used in both collateral calculations and liquidations, among other functions) that must factor in the base token price, the yield earned in the vaults, the supply and distribution differences between the base token and vault token, the market price of the vault token, and more. Whenever applicable, Dolomite uses Chainlink Price Feeds as the most proven price data solution for token prices, giving users unmatched confidence in the security, reliability, and accuracy of Dolomite’s price data.
Another key consideration for pricing is not just the price itself, but when, how, and in what conditions the price is pushed on-chain. This is where Chainlink Automation helps secure ERC-4626 vault assets for Dolomite lending markets by helping execute price updates on-chain based on specific conditions. As an example, price data for a specific vault asset can be configured to be pushed on-chain only when there is a deviation threshold that passes a certain percentage (i.e., 0.25% change) or after a certain amount of time has elapsed (heartbeat).
Chainlink Automation is a decentralized service purpose-built to manage tasks on behalf of smart contracts. Chainlink Automation leverages decentralized, hyper-reliable, and economically incentivized automation nodes to wake up smart contracts when they need to perform critical on-chain functions, which usually take place at specific time intervals or in response to external events (e.g., when an asset hits a specific price).
By using the most reliable, generalized automation service on the market, Dolomite can build custom pricing update parameters for each unique digital asset with the confidence that functions will be executed on time, every time — unlocking reliable margin lending and borrowing with accurate liquidations.
“Chainlink provides a comprehensive suite of Web3 services for cutting-edge DeFi protocols like Dolomite. By providing a reliable way to configure price updates for different assets, Chainlink Automation supercharges Dolomite’s mission to expand the utility of long-tail and unique yield-bearing assets in a secure manner.” — Corey Caplan, Co-Founder of Dolomite.
About Chainlink
Chainlink is the industry-standard Web3 services platform. It has enabled trillions of dollars in transaction volume across DeFi, on-chain finance, gaming, NFTs, and other major industries. As the leading decentralized oracle network, Chainlink empowers developers to build feature-rich Web3 applications with seamless access to real-world data, off-chain computation, and cross-chain interoperability across any blockchain, providing global enterprises with a universal gateway to all blockchains.
Learn more about Chainlink by visiting chain.link or reading the developer documentation at docs.chain.link. Register for SmartCon 2023 in Barcelona, the Web3 event of the year happening this October 2–3.
About Dolomite
Dolomite is a next-gen margin trading protocol offering high capital efficiency and the ability to support a much broader range of assets for use in margin trading and borrowing than is available elsewhere in DeFi. This means users can earn more and perform more powerful trading, borrowing, and hedging than ever before, all from a clean and easy-to-use interface.
Learn more about Dolomite at dolomite.io, read our docs at docs.dolomite.io, and join our community on Discord or follow us on Twitter to stay up to date.
