Oracle Security’s Role in DeFi Derivatives Markets with Chainlink & GMX

Chaos Labs is ready to share their latest collaboration with Chainlink Labs and GMX to optimize and secure on-chain financial apps. The long-awaited GMX V2 launch at Arbitrum uses Chainlink data streams, an all-in-one solution for decentralized finance (DeFi) that combines automated trade execution and low-latency data delivery.

The fast-growing DeFi derivatives market with high throughput and the advent of low-cost blockchains like Arbitrum, with short time-to-close and minimal gas fees can perfectly optimize on-chain trading experiences. This innovation set the stage for explosive growth in the field.

However, with such a wonderful invention comes great responsibility. With the expansion of the DeFi derivatives market, the role of Oracles, which includes entities to feed reliable, timely and accurate data into financial ecosystems, becomes more important.

The incentives and complexity of systems they create open new doors for exploitation. Hence, the role of Oracle Security is very important. Oracle aims to ensure secure DeFi apps that directly impact financial outcomes such as LPs’ profitability and liquidation time. Hence, choosing a secure Oracle service requires a calculated decision considering reliability, decentralization and resilience.

Chaos Labs has developed tools to assess the resiliency and robustness of the Oracle network and created various exploit columns to verify its integrity and ensure that manipulation costs exceed theoretical payoffs.

The expansion of the DeFi derivatives market has brought about all new levels of leverage accessibility, increasing transaction size and volume. However, this development has brought new challenges, especially related to high stakes of leverage and latency. ChainLink Labs has developed solutions in conjunction with ChainLink Data Stream to address these challenges. Decentralized and transparent data infrastructure caters to latency-sensitive markets such as the DeFi derivatives market.

Another leader in the field of decentralized permanent exchange, GMX, has taken a significant step forward by launching V2. GMX joins Chaos to scale GMX V2 and ensure efficient and secure deployment. To provide a fair and transparent merchant experience, Chainlink data streams provide ultra-low latency data updates and allow multiple leading data providers to reliably deliver timely and accurate data, multiple decentralized layers, conflict-of-interest data and protection. Deep security.

GMX integration with this Chainlink Oracle has enlarged the role of security, addressing important security issues such as latency, meeting the requirements of strict data quality controls, and protecting customers from price manipulation.

In the highly dynamic world of DeFi, where risk management has become a discipline, Chaos Labs recently partnered with industry leaders Chainlink Labs and GMX to advance data security and risk management in the DeFi derivatives space.

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