CACHE Gold, a DeFi infrastructure protocol that supports a fully secured, redeemable, and authorized tokenized gold asset, has implemented Chainlink Proof of Reserve on the mainnet of Polygon. After the integration of the industry-leading oracle network, which is already responsible for helping to safeguard tens of billions of dollars of assets throughout the DeFi ecosystem, CACHE Gold users are now able to verify on-chain that cross-chain CACHE Gold tokens (CGT) on Polygon are completely backed 1:1 by CGT tokens on Ethereum.
This most recent announcement builds upon prior Chainlink news, such as integrations of Chainlink Proof of Reserve and Chainlink Price Feeds on Ethereum mainnet. The goal of this update is to monitor the locked gold that is currently backing CGT and to let users verify that the token’s value appropriately reflects real-world market pricing for gold. In the end, the combination of these many interfaces provides consumers with increased confidence that the CGT tokens used on Polygon are backed by significant supplies of gold in the physical world.
Brian Hankey, Co-founder of CACHE Gold said, “We’re excited to integrate Chainlink Proof of Reserve to help provide users with stronger assurances that CGT tokens on Polygon are backed 1:1 by tokens on Ethereum. By leveraging the industry-leading oracle network, we’re able to more securely bring one of the most popular assets in the world to Polygon’s DeFi ecosystem.”
Taking Advantage Of Chainlink To Enhance Transparency
One CACHE Gold Token is equivalent to one gram of pure gold that has been held in secure locations all over the world. This tokenized form of gold is completely backed, redeemable, and regulated. Every gram of gold is monitored by the asset monitoring platform GramChain and then validated by Chainlink Proof of Reserve, with the proof being published on-chain. This mechanism is designed to guarantee that the total number of tokens in circulation will never surpass the amount of real gold that is held.
In the case of on-chain tokens that are backed by off-chain reserves, recurrent verification made possible by Chainlink Proof of Reserve contributes to an increase in transparency and helps maintain the status of the reserves supporting the tokens. Users have access to a reliable, highly accessible, and transparent source of information about the reserves that back CGT as a result of publicly validating in real-time that each token on Polygon is supported 1:1 by tokens on Ethereum.
The final outcome is that one of the most popular assets on the globe, which has been seen for a very long time by some investors as a safe-haven asset, is now able to be used as a form of collateral within the Polygon DeFi ecosystem. This was the intended purpose of the project all along. Chainlink is the industry standard for constructing, retrieving, and selling oracle services, which are required to run hybrid smart contracts on any blockchain.
Chainlink oracle networks make it possible for smart contracts to securely connect to any external API and leverage off-chain computations in order to enable feature-rich applications. Chainlink is presently protecting tens of billions of dollars across the DeFi industry, the insurance industry, the gaming industry, and other important businesses. Additionally, Chainlink provides a common gateway to all blockchains for global enterprises and top data suppliers.
Chainlink Proof of Reserve’s Optimal Features
The data required to determine the real collateralization of any on-chain asset that is backed by off-chain or cross-chain reserves are made available to smart contracts via Chainlink Proof of Reserve. Chainlink Proof of Reserve is a protocol that is run by a decentralized network of oracles. It allows the independent auditing of collateral in real-time, which helps to protect user funds against unexpected fractional reserve activities and other fraudulent activities by off-chain custodians. Among the distinguishing features of Chainlink Proof of Reserve are:
| Automated On-Chain Audits | By maintaining a current reference contract, smart contracts can receive instantaneous, on-chain verification of an asset’s collateralization, eliminating the need for manual audits. |
| High-Quality Data | Chainlink can obtain data from top data providers who are commercially encouraged to deliver highly precise and easily accessible data by utilizing External Adapters. |
| Decentralized | Since Chainlink Proof of Reserve Feeds is decentralized at the level of the data source and the oracle node, there are no single points of failure in the acquisition and distribution of external data to Polygon. |
| Transparent | Anyone is able to monitor the Chainlink Proof of Reserve Feeds in real-time, making it possible for any user to independently verify that assets have been collateralized. |
Both the expanding DeFi ecosystem and the traditional financial system now have a solution to increase the transparency of their operations thanks to Chainlink Proof of Reserve. This is accomplished by providing definitive on-chain proof of any asset’s actual collateralization. As the ecosystem for smart contracts continues to develop, it is of the utmost importance to guarantee that market failure brought on by opaque operational processes and noxious collateral is committed to the archives of history.
In order to obtain and verify reserve data, Chainlink Proof of Reserve takes advantage of the industry’s biggest decentralized collection of security-reviewed and Sybil-resistant node operators. In contrast to alternative approaches, Chainlink nodes are autonomous and resistant to assaults such as man-in-the-middle and denial-of-service. Due to the implementation of Chainlink Proof of Reserve, the DeFi ecosystem is now in a strong position to scale and contribute to the security of the next generation of trust-minimized financial products.
