Kava Integrates Chainlink as its Official Oracle Network to Bring DeFi to Cosmos

Sarah Austin
Mar 26, 2020 · 8 min read

We’re thrilled to announce that Kava has formed a long-term partnership with Chainlink, the market-leading decentralized oracle network, making it Kava’s official/default oracle.

Integrating Chainlink’s world-class oracles strengthen the Kava DeFi platform with secure price data, now made available for the first time to all Cosmos chains. Kava’s scalability combined with Chainlink’s oracles provide the Cosmos ecosystem with the highest-quality data to make secure, truly reliable Decentralized Financial Products.

A decentralized stablecoin is the backbone of a robust DeFi ecosystem because it replicates the trusted stability of a traditional financial infrastructure’s fiat currency. Kava has built the first cross-blockchain and multi-asset collateralized debt position (CDP) product, wherein users can collateralize a multitude of crypto assets in exchange for a loan in the form of Kava’s stablecoin USDX. USDX brings stability not only to Kava’s DeFi platform but also the entire Cosmos ecosystem by giving users reliable forms of payments, loans, and collateral. It also provides an interest yield that is higher than traditional cash or bank savings accounts.

In order to become the most trusted DeFi stablecoin, USDX requires the most secure and reliable oracle mechanism for accessing high-quality market data. If the oracle sourcing and delivering data is inaccurate or vulnerable to manipulation, the entire DeFi ecosystem that relies on this stablecoin becomes unstable.

Maintaining the security of Kava’s USDX stable currency is the critical first step in Kava’s evolution into the most reliable DeFi platform. To ensure that the oracle supporting USDX satisfies Kava’s high security standards, we conducted extensive due diligence on which oracle mechanism provides the most secure, accurate, and reliably delivered data. Our exhaustive research showed that Chainlink greatly exceeds every other oracle mechanism across all parameters. Chainlink’s Price Reference Contracts are not only decentralized using many of the same high quality node operators that power Kava, but are also uniquely hardened against various manipulation attacks that are not as well known or even understood by oracle mechanisms other than Chainlink. Chainlink provides our USDX with a battle tested oracle that is resistant to various attack vectors.

Chainlink, The Official Oracle for All Kava DeFi Applications

Based on our extensive evaluation of oracle mechanisms, we have also selected Chainlink as the official oracle solution for Kava’s DeFi platform; Chainlink oracles will power all future DeFi products built on Kava. Some of the reasons why we chose Chainlink as Kava’s oracle mechanism include the following:

  • Higher Quality Data from Credentialed/Premium APIs — The Chainlink network enables nodes to call data from credentialed APIs via their external adaptors. This unique capability brings the highest quality data to Kava’s DeFi platform. Data can be sourced through credentialed APIs from highly respected data aggregators that are Sybil resistant and can maintain coverage across all the areas where volume for USDX trading may shift. We found that the other oracle mechanisms that claim data quality do not actually have the capability of using password protected/credentialed APIs which deliver premium data, and are forced to use significantly lower quality data from open/free APIs and/or trial plans. This opens them up to all types of easy to implement data manipulation attack vectors. Furthermore, Chainlink only gets its data from the highest quality data aggregators, which we found to be in stark contrast to the nonchalant attitude towards data quality expressed by other oracle mechanisms we evaluated.
  • Sybil Resistant and Security Reviewed Nodes — All Chainlink nodes supplying data to Kava have been through a rigorous security review process, many of them also making 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.
  • A Proven Track Record — Chainlink is the only decentralized oracle network that has a proven track record of servicing smart contracts live on the mainnet worth hundreds of millions of dollars that have consistently relied on their secure and reliable data. This exceptional performance is easily verifiable on-chain and why they are already used and supported by numerous top DeFi protocols.
  • A Highly Decentralized Oracle Mechanism — Chainlink is the most decentralized oracle network we’ve seen by far. It has hundreds of nodes and progressively greater guarantees for its highest quality nodes. This ensures that it can not only provide large security guarantees now, but can also scale the number of nodes used to provide data to Kava as the need for greater decentralization increases.
  • Unique Trusted Execution Capabilities — Chainlink’s work on TownCrier is well known to have created the first and most widely used Trusted Execution Environment based oracle mechanism. Chainlink’s additional capabilities created by TEEs, such as TEE based TLS verification, can create even greater assurances to data’s origin.

Due to the above, and many additional reasons, Kava will be building Chainlink into our system as our official/default oracle solution. This ensures that all Kava developers are using the most secure infrastructure available when accessing external data. This strengthens our entire DeFi ecosystem, making Kava the most trusted hub in Cosmos for developing next-generation DeFi Dapps in lending, payments, derivatives, tokenized assets, and much more.

Making Chainlink the Oracle Solution for All of Cosmos

Our integration is the first-ever Cosmos-SDK implementation of Chainlink. This means that Chainlink nodes will run and secure data directly on the Kava blockchain. Since Kava’s blockchain is built using Tendermint, Tendermint-based blockchains within the Cosmos ecosystem (Terra, Cosmos Hub, Agoric, Aragon, and others) will now be able to retrieve market data such as cryptocurrency, FX, and commodity prices from Chainlink’s decentralized oracle network posted on Kava. This makes Kava the trustworthy bridge between these two ecosystems for accessing secure and reliable Chainlink oracle data. Additionally, Kava will build a cross-chain bridge to enable LINK (an ERC-20 token) to be used natively as payment and staking collateral for oracle services through Kava.

By natively integrating Chainlink Price Reference Contracts, Kava will act as a multi-functional bridge within Cosmos for requesting, paying, securing, and consuming Chainlink’s high-quality data across the Cosmos ecosystem.

All Tendermint blockchains can make requests for Chainlink data by sending a query to the Kava blockchain. They will pay for these Chainlink oracle services on Kava in a wrapped LINK token transferred from the existing LINK (an ERC-20 token) which will be bridged cross-chain onto the Kava platform so that it can be used to pay the Chainlink Oracles for their services and implement the upcoming capability of using LINK for staking. Chainlink nodes collectively process these data requests and send the aggregated response as an on-chain update to the price. Dapps can call these Price Reference Contracts to consume its data and trigger key smart contract functions on Kava or their own native Cosmos environment.

If Cosmos Hubs select not to natively host DeFi applications, they can use Kava as the standard DeFi Hub for leveraging existing financial products such as USDX and building their own DeFi Dapps that utilize Kava as the underlying blockchain.

Pioneering the Next Great DeFi Ecosystem

We believe that the security and reliability of data are critical in a time where global financial markets face macro uncertainty and extreme volatility. Kava’s platform continues to provide the critical resources needed by crypto-projects to not just survive in these turbulent times, but also sustain and thrive into the future. This integration opens the doors for all the blockchains and developers within the Cosmos ecosystem to finally get access to a secure stablecoin and Chainlink’s market-leading oracle solution.

Kava is now the new distribution point for accessing a decentralized stablecoin, building DeFi applications, and leveraging external data via Chainlink’s oracles for Hubs within the Cosmos ecosystem.

“This integration brings provably secure off-chain data to all Kava DeFi applications, which can ultimately seed the development of a much more robust and trusted DeFi ecosystem within Cosmos. We’re also excited to work with the innovative team at Kava to empower their multi-asset stablecoin USDX, by ensuring its critical functions only execute based on accurate data supplied by Chainlink’s secure and reliable oracle network.” — Sergey Nazarov, Co-founder of Chainlink

“After doing extensive due diligence, Chainlink’s oracle solution is the obvious choice as Kava’s official oracle for our stablecoin USDX and our DeFi platform as it provides reliability and provable security end-to-end. We found Chainlink’s team extremely knowledgeable and their leading technology stack separates it from other solutions by offering advanced features such as curated high quality data aggregators for data inputs, security reviewed nodes, and eventual TLS verification to prove a data’s origin — all factors critical for securing high-value DeFi systems. Chainlink is a proven and battle-tested solution in the DeFi arena. We have the utmost confidence that we can rely on Chainlink oracles to power both Kava’s platform and other applications within the Cosmos ecosystem going forward.” — Brian Kerr, CEO and Cofounder of Kava Labs

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 us here. We 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 follow us 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.

Kava Labs Blog

Kava Labs Blog

This publication features news and articles from the Kava Labs team. Kava Labs is a developer of the Kava blockchain, the first cross-blockchain DeFi platform.

Sarah Austin

Written by

Author & TV host formerly @Forbes @MTV @FOXnews @Bravo @Entrepreneur & Marketing Manager @Oracle @SAP @Citi @Ford @Intel Current: @Kava_Labs

Kava Labs Blog

This publication features news and articles from the Kava Labs team. Kava Labs is a developer of the Kava blockchain, the first cross-blockchain DeFi platform.

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