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According to the latest blog post, Pendle Finance—a permissionless yield trading protocol—has announced its integration with Chainlink Price Feeds on Arbitrum and Optimism mainnets. The collaboration aims to further solidify Pendle’s position as a leader in facilitating sophisticated yield management strategies for crypto traders and liquidity providers.
Pendle Taps Into Chainlink’s Robust Oracle Infrastructure
Pendle has integrated Chainlink Price Feeds on both Arbitrum and Optimism mainnets. By syncing up with Chainlink, the market-leading Web3 services provider, Pendle has gained a decisive edge, equipping itself with industry-standard pricing data. This pivotal partnership is aimed at ensuring accurate conversions of ETH liquid staking assets, notably rETH and stETH, within Pendle Finance’s liquidity pools.
As part of the initial collaboration, Pendle Finance has opted for specific Chainlink Price Feeds: wstETH/stETH and rETH/ETH. Chainlink is renowned for its seamless, easy-to-integrate architecture that has been thoroughly vetted in live production settings.
It is responsible for securing some of the DeFi space’s leading protocols, which collectively manage tens of billions of dollars in smart contract value. Even in volatile scenarios, such as exchange outages, flash crashes, or data manipulation attempts via flash loans, Chainlink has maintained its robust security and high availability.
Pendle Finance offers a unique feature that allows users to separate yield-generating assets into their original principal and generated yield. By depositing ETH, users can mint two specific tokens: PT stETH for the principal amount and YT stETH for the yield. This mechanism, similar to the concept of stripped bonds, opens up a wide range of advanced yield management strategies. It enables users to trade and invest in the yields of assets like staked ETH and cDAI without affecting their principal.
Pendle relies on Chainlink’s decentralized oracles for real-time, reliable price data, ensuring secure and accurate asset conversions in its liquidity pools.
Chainlink’s High-Quality Data Attracts DeFi Projects
One of the standout features of Chainlink is the quality of data it offers. Chainlink Price Feeds source information from a wide range of premium data aggregators. This ensures the price data is aggregated from hundreds of exchanges, weighted by trading volume, and meticulously cleaned to remove outliers and wash trading. This results in extremely accurate global market prices that are resistant to manipulations or inaccuracies that could be introduced by a single or a small set of exchanges.
Additionally, Chainlink Price Feeds are secured by a network of independent, Sybil-resistant oracle nodes that have undergone rigorous security reviews. These nodes are operated by leading blockchain DevOps teams, data providers, and traditional enterprises. Impressively, Chainlink’s nodes have maintained a strong track record of reliability, even in challenging conditions like high gas prices and infrastructure outages.
TN Lee, Co-Founder and CEO of Pendle, said, “Chainlink Price Feeds are the industry standard in security for DeFi, making them the only future-proof pricing solution that we could confidently use to help secure the growing adoption of Pendle’s staked ETH offerings.”
The Chainlink Price Feeds benefit from being part of a decentralized network at multiple levels—from the data sources to the oracle nodes and the broader oracle network. This multi-layered decentralization provides robust protections against potential downtime and tampering, either by the data provider or the oracle network itself. Also, Chainlink offers a robust reputation system and on-chain monitoring tools, enabling users and developers to independently assess the past and current performance of its oracle nodes and networks.