Chainlink launches a new data product designed for DeFi applications

Chainlink, one of the leading oracle platforms in the blockchain and cryptocurrency space, has introduced a new product specifically designed for the decentralized finance (DeFi) market, called the Chainlink DeFi Yield Index. This product is designed to aggregate and provide data on lending rates from various DeFi protocols, offering a reliable and comprehensive source of information for users and institutions within the DeFi ecosystem.

The Chainlink DeFi Yield Index operates on Chainlink’s decentralized oracle network, which is already well-known for delivering accurate and transparent data. To enhance the accuracy and market representativeness of the index, Chainlink has partnered with Space and Time, a data platform that utilizes zero-knowledge proof technology. Space and Time serves as the data infrastructure provider, using its blockchain indexer and database to collect and process real-time on-chain data. This ensures that the index consistently reflects the current state of the market and ongoing activities on the blockchain.

Initially, the Chainlink DeFi Yield Index will focus on the most liquid and widely used DeFi assets, including USD Coin (USDC), Tether (USDT), wrapped Bitcoin (wBTC), and wrapped Ethereum (wETH). These assets were chosen because they represent a significant portion of the total value locked (TVL) in the DeFi ecosystem and are widely utilized in lending and borrowing protocols.

Within this ecosystem, Chainlink acts as the index administrator, responsible for ensuring that the index adheres to the transparency and reliability standards that Chainlink has established. Meanwhile, Space and Time takes on the role of the calculation agent, performing the complex computations required to ensure the index remains accurate and reflective of real-world market conditions.

This product is expected to benefit a wide range of participants in the DeFi ecosystem. Capital markets institutions can use the index to identify yield-earning opportunities across lending protocols, while DeFi protocols can leverage it for risk management and optimizing capital deployment. Additionally, the broader community of users can utilize the index to make more informed investment decisions.

The Chainlink DeFi Yield Index is a significant addition to Chainlink’s growing suite of products, which already includes solutions such as Chainlink Price Feeds, Data Streams, Cross-Chain Interoperability Protocol (CCIP), and Proof of Reserve. The launch of this index not only reinforces Chainlink’s position as the leading standard for verifiable data in DeFi but also opens up new opportunities for traditional financial institutions and individual users to explore and capitalize on the potential of the public blockchain ecosystem.

Scott Dykstra, co-founder of Space and Time, commented: “Chainlink has established itself as the standard for verifiable data across DeFi and the emerging on-chain finance ecosystem. Space and Time provides a transformative database solution that unlocks advanced Web3 use cases. We’re excited to provide the indexing and database infrastructure to support the calculations for the Chainlink DeFi Yield Index, enabling financial institutions to capture more opportunities in the public blockchain ecosystem.”

With the launch of the Chainlink DeFi Yield Index, Chainlink continues to demonstrate its commitment to building advanced technological solutions that drive the growth and widespread adoption of decentralized finance globally. This product represents another step forward in bridging the gap between traditional finance and the rapidly evolving world of blockchain-based financial systems.