Coinbase announced the launch of a ‘DeFi Price Oracle’ which to serve the crypto DeFi movement. According to Coinbase, the oracle is not a competitor, but an ‘additive’ to DeFi oracles like Chainlink.
Coinbase has launched a price oracle for BTC-USD and ETH-USD. The price feeds available via the Coinbase Pro API and can be used for a variety of decentralized applications.
Currently, the Chainlink price reference oracle is leading oracle service which is composed of independent nodes which are run by blockchain DevOps and security teams. It offers price oracles for more than 26 pairs of cryptocurrencies. These are composed of security reviewed, and sybil resistant.
However, price is largely dependent on markets and cannot be sourced from ‘trustless’ sources. This is essential even for regulatory compliance to rule out market manipulation claims. Now, Coinbase is proposing a way to make their market data on-chain in a trustless manner. The blog post notes,
Anyone can publish the prices on-chain and since the data is already signed by Coinbase’s private key, there is no need to trust the publisher. Using the Coinbase Price Oracle public key, anybody can verify the authenticity of the data.
Many blockchains and crypto-related services like exchanges aggregate their price references from other sources. Decentralized Exchanges (also a DeFi) will find great use of this application. Compound, a lending based DeFi platform has already signed up with the Coinbase Price Feeds.
An off-chain verifiable price oracle from trusted sources will add to the autonomy in DeFi space. Justin Mart, Data Scientist and Corporate Development head at Coinbase tweeted,
Very excited to see this step in DeFi oracles.
Now we need @krakenfx @binance@Gemini@Bitstamp and others to add their signed price oracles as well! Let’s all buidl together
Even Chainlink can make use of these exchange driven price nodes to offer a new set of price oracles for trading pairs.
Do you think other exchanges will join Coinbase with signed oracles? Please share your views with us.
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com
