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Wrapped.com selects Chainlink PoR to provide full on-chain auditability

source-logo  invezz.com 28 September 2021 17:07, UTC

Wrapped.com has selected Chainlink (LINK/USD) Proof of Reserve (PoR) to ensure asset transparency by providing full on-chain auditability of all wrapped assets supported, Invezz learned from a press release. The assets are fully backed by a qualified custodian in a 1:1 ratio. Chainlink PoR supplies smart contracts with the data they need to calculate the true collateralization of wrapped.com assets by means of on-chain reference feeds.

What is Chainlink PoR?

Chainlink PoR is a decentralized system that uses highly reliable and secure oracle networks to enable independent real-time auditing of collateral backed wrapped.com assets. It allows users to verify the collateralization of their wrapped assets.

Mason Borda, CEO of Tokensoft elucidates the value of Chainlink PoR:

“For far too long, much of the blockchain industry has resembled the traditional financial world where user assets are freely rehypothecated and used at the discretion of large, centralized entities. Chainlink PoR creates a whole new level of transparency for DeFi and CeFi institutions through its automated auditing system that can be verified by anyone in real-time.”

Chainlink PoR helps enhance transparency within the DeFi ecosystem, specifically as regards asset collateralization, setting a new industry standard for auditability. Users have hard proof of asset backing.

How does Chainlink PoR work?

Chainlink’s oracles use off-chain computation to verify wallet balances at a brief and regular interval – every ten minutes. The PoR feed is updated with new data whenever the system detects a deviation beyond a preset threshold from the previous balance stored on-chain.

Smart contract-based DeFi apps that utilize wrapped.com assets can use customized logic to protect funds automatically during an event characterized by under-collateralization. This is possible by making an asset’s reserve data accessible on the blockchain. Apps that use wrapped.com assets as collateral to secure other asset borrowing will benefit from Chainlink PoR as an early warning system in particular.

Guaranteeing transparency

Chainlink PoR makes it possible for both the traditional financial system and the dynamic DeFi ecosystem to make operations more transparent with solid collateralization proof. It helps maintain trust with growth of the smart contract ecosystem and prevents market failures due to opaque lending.