- Synthetix will use Chainlink decentralized oracles to power all price feeds on the Synthetix exchange.
- Synthetix is moving away from centralized oracles as it heads toward fully decentralized governance.
- SNX tokens are up more than 500% in price so far this year.
Syhthetix announced today the full integration of Chainlink price oracles for all assets on the Synthetix exchange, including price feeds for all synthetic assets on the index. Synthetix had previously implemented Chainlink price oracles in commodities and forex Synths, but will now shift away from internally maintained oracles to the Chainlink solution on the road to full decentralized governance.
Synthetix generates synthetic assets as tradable tokens on Ethereum, with prices for different Synths pegged to real-world assets, from crypto assets such as Bitcoin or Tron’s TRX tokens to currencies like British Pounds or Euros. Other synthetic assets are planned for the future, tied to assets like oil or food, commodities, and additional currencies.
Synthetic assets are backed by collateral assets worth 750% of their value when they are created, helping the assets stay liquid during major price movements.
Synthetix announced in June more details for plans to eventually cede power to holders of the SNX protocol token, but have not set a date for full decentralization of Synthetix governance. Governance duties will be split into three decentralized autonomous organizations (DAOs) to control the protocol, grants, and funding for the Synthetix development team. So far this year, Synthetix SNX protocol tokens are up more than 500%.
The switch to full Chainlink integration marks a major milestone for the Synthetix protocol, which until today relied heavily on oracles built and maintained by the internal development team. As with other protocols such as Compound and Ren, Synthetix developers maintained a greater degree of control over the early development of the protocol in order to carefully develop the smart contract architecture and control risk.
The Synthetix statement outlined the testing process applied to Chainlink oracles over the past several months, ensuring the supply of pricing data for different assets can scale with demand as new Synths are added to the platform. Chainlink also reportedly delivered more accurate pricing data than Synthetix’ internally developed oracle solutions, helping lower spreads and provide consistently reliable market data feeds.