Opium Exchange is pleased to announce our live integration with Chainlink’s decentralized oracle network to obtain verified real-world pricing data for our derivatives exchange. Utilizing Chainlink’s Price Reference Data will significantly reduce the time required to list and deploy new derivatives contracts on our platform, and provide accurate and trusted price reference data for a range of assets.
Understanding Opium Protocol
The Opium Protocol is a universal blockchain protocol to easily create, settle, and trade virtually any derivative and other financial instruments in a professional and trustless way on the Ethereum blockchain. Our protocol powers the Opium Exchange — a decentralized non-custodial derivatives platform. The Opium Exchange is an access point to the Opium Protocol that handles order matching, creation, settlement, secondary markets, and payouts for financial contracts.
Our protocol and its associated exchange will represent one of the easiest and quickest ways for both users and developers to deploy and trade derivatives contracts. Users of the Opium Exchange simply choose the instrument they wish to trade, while our ecosystem back-end processes take care of the rest — from creating a contract through to listing, trading, and finally expiration. Likewise, developers using our protocol will now have an audited and universal framework for developing derivatives in a professional way, compliant with existing financial market standards.
To maintain transparency in line with our decentralized protocol, and provide accurate pricing data, a trusted oracle provider is required to deliver real-world data for our derivatives contracts. This is why Opium Exchange has selected Chainlink’s leading decentralized oracle network for price reference data to power our derivatives contracts.
Why Chainlink Oracles
Chainlink is a decentralized oracle network that connects smart contracts to real-world data generated outside the blockchain (off-chain). Chainlink uses verifiable decentralization at both the node operator and data source level to ensure there is no single point of failure in the sourcing and delivery of the data to the smart contract.
Chainlink’s Price Reference Contracts are a collection of decentralized oracle networks that provide over 30 on-chain price feeds for multiple asset classes used in DeFi, including cryptocurrencies, fiat, and commodities. Each node operator participating in the Price Reference Contracts is security-reviewed, Sybil-resistant, and independently-run by experienced blockchain DevOps and security teams, and each piece of market data is sourced from high quality data aggregators.
Derivatives smart contracts deployed on Opium Exchange are connected to Chainlink’s price reference data feeds, reading pricing data at execution of the derivatives contract to calculate payouts. By virtue of Chainlink’s open visualizations of the Price Reference Data oracle networks, traders on Opium Exchange can independently verify the accuracy and on-time delivery of prices at contract maturity.
Technical Integration Details
Opium Protocol has an ‘Oracle ID’ concept, which is designed to allow ‘plug-and-play’ smart contracts, wherein that the Oracle ID is utilized as a pluggable data source for derivatives contracts on the Opium Protocol. For the Chainlink integration, we created a smart contract that implements Opium’s Oracle ID interface, which fetches price data from the Chainlink aggregator smart contract at derivative maturity. This smart contract is used as a price reference at the execution of the derivative contract to calculate the payout.
Data from Oracle IDs are pushed to Opium Core through Opium Oracle Aggregator, which acts as a caching layer for oracle data to ensure pricing data integrity and immutability. Opium Exchange’s backend also periodically fetches current pricing data from Chainlink aggregators using The Graph Protocol, to calculate and provide accurate asset charts and prices to users.
Opium Exchange has initially listed weekly futures contracts and options using the Chainlink ETH/DAI oracle. Ouﬁr trial integration, which took place in mid-May, involved the launch and first expirations of our derivatives contracts powered by Chainlink’s price reference data, and we are pleased to report that the integration ran smoothly. Our first contract matured successfully on May 22nd, and payouts were completed shortly afterward.
Going forward we plan to adopt more Chainlink oracles with plain or complex derivative logic, as demand for our financial derivatives contracts grows. We will be working closely with our community in the coming months to collect user feedback and explore new contract types. Users who are interested in listing tailored contracts are encouraged to contact us.
Andrey Belyakov, CFA, founder of Opium Team, commented:
“We were very impressed by the decentralization and security of Chainlink’s oracle network, and it was a natural fit to integrate Chainlink’s price reference data directly with our exchange. The integration process was effortless and fast, and will significantly reduce the time required to list new derivatives contracts on Opium Exchange. Thanks to Chainlink’s simplicity and their team’s experience, we can list futures, options, CDS’, CFDs, and many other derivatives contracts with accurate and transparent market data very fast.”
Opium Exchange is Live: first options are listed
Check out our live options for ETH/DAI, or alternatively our options for ETH gas prices. Users can trade these contracts instantly at market price, or set limit orders. We have seen the first market makers, and liquidity is already growing. Because we believe in layer two solutions, we did not make automatic market-makers on-chain, but built our order books on meta-transactions, similar to 0x-protocol. Anyone can run a market maker connecting to our APIs or visit the platform to drop a limit order. Opium focuses on a professional financial structure and reliability rather than market making, and thanks to Chainlink, we don’t need to solve an oracle challenge, it is solved with the highest quality.
Users can also deploy exotic derivatives contracts on the Opium Protocol within minutes if you are a developer, especially if you combine existing derivative logic (futures, options, CDS, interest rate swaps, etc.) to Chainlink asset price oracles — find out more here.
You can fill in the listing form for Opium Exchange if you have a great idea regarding a decentralized financial contract and want it to be listed on the professional ecosystem for free.
Opium’s founder Andrey Belyakov is a member of the CFA Institute, a professional derivative trader and fund manager with ten years of experience with 30 billion EUR AUM portfolios. He is the founder of the Opium Team, The Art Exchange, and a private venture investor. Earlier, during his mathematical career, Andrey was working on Queue Theory for large distributed systems and Theory of Probabilities in Moscow State University.
Opium Team is a small team of professional traders, mathematicians, and programmers with demonstrable experience in their field. Large parts of economies are in the hands of centralized agents who exploit their positions. We are convinced that they are no longer necessary and as such we designed the Opium Protocol to ensure transparent, fair, and open financial markets.
Feel free to drop us any questions or your feedback in the Opium Telegram group. Contact us if you need help with building derivatives on top of the Opium Protocol.
Stay tuned and follow Opium on Twitter.
If you’re a developer and want to connect your smart contract to existing data and infrastructure outside the underlying blockchain, reach out to them here! They can help you quickly and securely launch your data-enabled application or Chainlink Price Reference Data Contract on mainnet today. You can also visit the developer documentation or join the technical discussion on Discord. Learn more by visiting the Chainlink website or following them on Twitter or Reddit.