On 24th July 2020, the Elastos Ethereum Info team announced a new partnership with Chainlink. The announcement detailed that the partnership would be crucial in the development of an Elastos stablecoin.
Elastos Stablecoin will be cross-chain, and Chainlink Oracles will be responsible for powering it. The development team from Elastos will use Chainlink’s price reference data framework to deploy a decentralized price feed for ELA/USD.
Unravelling The Elastos Stablecoin
According to the team at Elastos, the stablecoin will stabilize the Elastos ecosystem and the entire DeFi space. The coin will pave the way for decentralized finance to enter the modern internet scene.
Elastos uses massive hash power to secure the DPOS-based Ethereum sidechain. ELA, Elastos’ native token, is secured by the main chain, which in turn enjoys the backing of over 50% of Bitcoin’s hash power. This backing, together with other features like low transaction costs and high-security levels, place Elastos at the forefront for providing the foundation for building a stable DeFi ecosystem.
The team at Elastos now plans to launch a stablecoin protocol that will collateralize ELA tokens. The protocol will also be responsible for minting stablecoins whose value will be pegged onto the USD.
So, how will this new protocol be valuable to DeFi users?
Users will receive a collateral price floor each time the protocol mines a new stablecoin. This price will be the limit for a liquidation trigger. Whenever the market price plummets below the liquidation price, users will have their CDP position liquidated, in reference to Chainlink’s ELA/USD price feed.
Why Elastos chose Chainlink
Two significant reasons why Elastos chose Chainlink for this project is the quality control of its price oracles and its Price Reference Data Model. Chainlink provides a reliable price feed for its users. It sources data from high-quality data aggregators and secure node operators. Besides, the model is specially designed for building decentralized oracle networks that are reliable and feature top-notch security.
Thanks to these features, the team at Elastos will use Chainlink for DeFi projects beyond the stablecoin. Elastos is looking to broaden its ecosystem to include dApps that bridge traditional infrastructure with real-world data. Future partnership projects will see Elastos develop various DeFi products, including asset management, borrowing and lending, synthetic assets, and tokenization products.
The partnership between these two leading solutions providers in the blockchain scene will undoubtedly be a force to reckon with. The combination of Elastos’ hash power and Chainlink’s reliable data will provide a solid foundation for DeFi products that offer both high-level security and performance.