Well, I didn’t think I’d be pushing something else today but given the most recent developments, it’s only natural.
In an official Medium post, also syndicated through Chainlink’s official Twitter account, the team behind Yield Credit detailed the integration of Chainlink’s price feeds into its mainnet.
What Does it Mean?
According to the official announcement, Yield Credit is “taking a proactive step in hardening the security of our protocol, ensuring our smart contracts consistently reference high-quality decentralized price data that is provably robust even amidst strenuous conditions such as during flash loans and high gas prices.”
The initial integration takes advantage of Chainlink Price Feeds to access price reference data on more than 30 cryptocurrency pairs. Some of them include LINK/ET, ETH/USD, and AAVE/ETH.
This information will be used to determine collateral ratios, principal amounts, YLD borrower rewards, and so forth.
It’s a huge step in making the protocol self-sustaining and more decentralized. Once again, the team behind Yield Credit didn’t disappoint.
Yield Credit Benefits Detailed Further
In my previous write-up, I detailed just a few of the benefits that users of Yield Credit can enjoy. Now, with the most recent announcement, the team dives deeper into the security side of the protocol, revealing even more information as to the protection measures put in place to prevent potential exploits. And by the looks of it, it’s just sexy.
Let’s take a look.
First, in case I didn’t make it clear in the previous post, Yield Credit is a non-custodial platform, meaning that users don’t have to give up control of their funds to a centralized third-party. Everything happens on-chain. This, combined with the fact that it’s also individualized and offers fixed-rate lending and incentivized borrowing brings about the following merits (some of them already discussed but still):
Generating Undiluted Earnings
There’s no shared pool where interest is diluted among various participants. As such, each lender receives the total interest of the loan once it’s repaid.
Incentivizing Individual Borrowers
For every single loan the borrower repays successfully, they receive a reward in YLD tokens, which is relative to the amount of interest they paid to the lender and the amount they borrowed.
Enabling Fixed Rates
Interest rates are hardcoded into the smart contract at loan creation. This means there are no money-market dynamics. Every loan has a fixed rate that’s guaranteed.
Isolating Protocol Risk
This is perhaps the one I should put an NB on. Funds on Yield Credit are isolated to the specific contracts for the individual offers, requests, and loans.
This means the asset risk is carried by individuals as opposed to every single user (in pooled solutions). Moreover, since there’s no single large pool of funds, potential wrongdoers are less incentivized to exploit the platform’s smart contracts.
This wraps it up - it was a quick update since it’s a significant announcement and one that’s definitely worth talking about.
As always, I’m leaving my ETH and BTC addresses below. If anyone feels like contributing, that helps me tremendously to keep this up and continue sharing content I find interesting and, hopefully, valuable to all of you reading.
ETH Address: 0x4179FF49AF205f30abFAb83d0b70687c2dfa2B3a
BTC Address: bc1ql47f2pxraxz3vny8ss5y2l3hzhqvh8m0a7t4g4
