The announcement of MakerDAO’s partnership with Chainlink has filled all news channels, so it’s impossible to stay aside.
Here’s what happened in short: MakerDAO platform has integrated the Chainlink oracles into the structure of Keeper Network, which is supporting the stability of DAI.
Let’s dive deeper into the topic and see what these two companies are and how the integration could affect their work.
What is MakerDAO?
It’s a decentralized firm whose aim’s to enable financial freedom and to level the economic playing field for everyone, particularly for those looking for more control over their assets or those living in economies suffering from hyperinflation. The goal is achieved by the Maker Protocol and its two native tokens — DAI and MKR. The protocol is a DeFi app allowing people to borrow funds by supplying collateral.
It actually is a stablecoin that always has to be pegged to the U.S. dollar, so its price ideally should be worth $1. However, DAI is a little different from the usual stablecoins. It does not depend on dollars in a bank account because it is generated when users deposit supported crypto assets as collateral. Even though this asset is a stablecoin, it’s available for swap. If you own the coin and want to make a DAI exchange, just make sure to find the proper service with real and positive feedback from other users.
What is MKR?
It is a governance token aimed to help keep the value of DAI as close to $1 as possible. MKR also powers decentralized community-driven governance. Anyone can purchase the asset and join the global community of MKR holders who help to govern the Protocol and retain the DAI stability via voting on proposed changes and updates. You can trade and swap MKR through crypto exchanges, too.
What is Chainlink?
Simply said, it’s a network of oracles (3rd party services) aimed to bring real information and events on the blockchain. Oracles add data to smart contracts. Their main “weakness” — oracles are centralized, which means they’re vulnerable to manipulation and aren’t completely trustworthy. This issue is solved by making an entire network of oracles that send tamper-proof and correct info to smart contracts. The network’s made of nodes run by independent operators, making it very secure and resistant to single failures.
The ecosystem of Chainlink is based on Ethereum. It creates various use cases for smart contracts and enables them to cooperate with real-world info such as stock prices, weather conditions, and even sports scores. This has numerous implications for sectors (finance, logistics and insurance) where precise and real-time data is important. Chainlink’s network also can link different blockchains and external APIs, making it really flexible and interoperable. With a growing list of partnerships and integrations, Chainlink now is a very promising blockchain company in the DeFi space.
In accordance with the announcement of Chainlink Labs on February 9, MakerDAO has effectively integrated blockchain data provider Chainlink’s smart contract automation into its Keeper system. It supports the stability of Maker’s DAI stablecoin.
Chainlink Automation is programmed to perform tasks. For example, it’s responsible for updating prices, balancing liquidity, and improving debt ceilings for collateralized assets.
However, we will keep an eye on the integration results and see if it really brings any significant changes to the MakerDAO platform.