As part of our mission to revolutionize futures trading, we are constantly innovating in our approach to building a highly secure platform that’s protective of user funds. We take platform security very seriously, which is why we’re integrating Chainlink’s Price Reference Contracts as an anchor to backup the existing price feeds on our platform. This marks the first time a centralized cryptocurrency futures exchange is relying on decentralized oracles to improve its platform security.
Incorporating Chainlink price reference contracts brings heightened transparency and reliability to a critical component of our platform. It provides traders with strong protection against price manipulation, ensuring that traders don’t become overexposed to slippage should our internal price feeds deviate too far from the global market price, as reported from Chainlink’s highly reliable and tamperproof price reference contracts.
The Importance of a Price Anchor
We have gone to great lengths to ensure that our internal price feeds are accurate by developing an index based on a variety of trusted spot market sources. However, price feeds can be subject to vulnerabilities and negatively impact users during situations of exchange manipulation or faulty data sources.
We aim to prevent any such incident from occurring by using a highly reliable and manipulation resistant price anchor. A price anchor is used as a frame of reference from which to detect deviations in other prices. We will use Chainlink’s Price Reference Contract as a price anchor and monitor if our internal feeds ever deviate from it by more than a defined percentage.
Why Chainlink Price Reference Contracts
When researching various solutions, Chainlink’s Price Reference Contracts stood out as the most secure and accurate cryptocurrency price feeds in the market.
Chainlink is a decentralized oracle network, responsible for connecting smart contracts to data outside the blockchain in a secure manner. Chainlink’s Price Reference Contracts are a collection of financial price feeds, containing all the cryptocurrency trading pairs needed by our platform. Chainlink uses a decentralized network of independent, Sybil resistant nodes, which each source price data from numerous high-quality data aggregators with strong market coverage, such as BraveNewCoin and Kaiko. All the nodes’ responses are aggregated together to produce a global market price for a trading pair, such as BTC/USD, with updates occurring every 1% change in price.
Chainlink’s Price Reference model provides Digitex with three important features: accurate prices, manipulation resistance, and liveness guarantees. Its decentralized design ensures that a malicious or incompetent actor cannot hinder the quality of the price data or the reliability of the price update. Additionally, the use of high-quality market data and secure node operators enforces high standards on each individual component of the network. Chainlink’s infrastructure is already relied upon for the security of millions of dollars by many leading DeFi applications.
We plan to start using Chainlink’s Price Reference Contracts to support trading of our initial market of BTC/USD Perpetual Contracts, and add additional price feeds as we launch more products. Unlike other centralized cryptocurrency futures exchanges where their backend processes are hidden, we’ve created a level playing field for traders. We provide new levels of transparency into how Digitex’s contracts function, with backup security to protect against abnormal events.
“Chainlink provides Digitex with highly reliable and transparent price feeds that protect our users against the negative outcomes of abnormal market conditions or internal complications. Using Chainlink price data enables us to deliver stronger security and performance guarantees to our users, furthering our vision to revolutionize futures trading.” – Adam Todd, Founder and CEO of Digitex.
If you’re a developer and want to connect your smart contract to existing data and infrastructure outside the underlying blockchain, reach out here. We 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 follow us on Twitter or Reddit.
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.