Tulip Protocol Integrating Chainlink Price Feeds on Solana to Help Secure Leveraged Yield Farming

Tulip Protocol, the premier yield aggregation and leveraged yield farming platform, is integrating Chainlink Price Feeds on the Solana blockchain.

By integrating the industry-leading decentralized oracle network, we will gain access to a high-quality, tamper-proof source of financial market data needed to secure leveraged yield farm positions. As a result, both lenders and borrowers will be provided a greater assurance that risky positions will be properly liquidated.

Tulip Protocol chose Chainlink as their go–to oracle solution because of its no-compromise approach to security and reliability, demonstrated by its verifiable history of accuracy and resilience during extreme market volatility, exchange/API downtime, and data manipulation attacks such through flash loans. Additionally, Chainlink Price Feeds on Solana can publish oracle updates on-chain at sub-second frequencies and with full market coverage to further ensure price data is reflective of real-time, global market conditions.

Securing Tulip Protocol Liquidations With Chainlink Price Feeds

Tulip Protocol is the premier yield aggregation platform built on Solana with advanced auto-compounding vault strategies. By taking advantage of Solana’s low-cost, high-speed blockchain network, yield can be frequently reinvested into vault strategies. Stakers then benefit from higher returns without requiring active management. Tulip also offers a leveraged yield farming product for users to increase their yield when depositing into two-sided liquidity pools.

Our leveraged yield farming aims to connect lenders — who earn an auto-compounded variable deposit rate yield — with borrowers who wish to increase their yield farming profits by paying to borrow additional assets that then get deposited into a farm. When a leveraged yield farm position is opened, a user supplies and borrows against their collateral, depositing both assets into a liquidity pool to earn liquidity mining incentives and trading fees. Opening a position results in the creation of a collateralized loan that must maintain a predefined loan-to-value (LTV) ratio. If the value of the collateral drops below an unsafe level, then the collateral is liquidated and sold to pay back the lenders.

In order to determine when leveraged yield farming positions should be liquidated, the Tulip Protocol requires price data to determine the value of both the collateral and borrowed assets, which are used to calculate the LTV ratio. However, due to the blockchain oracle problem, smart contracts cannot natively access off-chain data such as aggregated market prices. Smart contracts require an additional piece of infrastructure known as an oracle to fetch external data and deliver it back on-chain. Because liquidations play such a key role in managing the risk exposure of the platform, Tulip’s oracle solution needs to also aggregate from many oracle nodes and sources to ensure accuracy, uptime, and resistance to manipulation.

After looking into different oracle solutions, we found that Chainlink could provide the perfect blend of premium data quality, robust oracle security, and rapid update frequency to help ensure our liquidation mechanism follows global markets in real-time. Some of the reasons we choose Chainlink Price Feeds include:

• High-Quality Data — Chainlink Price Feeds source data from numerous premium data aggregators, leading to price data that are aggregated from hundreds of exchanges, weighted by volume, and cleaned from outliers and suspicious volumes.
• Secure Node Operators — Chainlink Price Feeds are secured by independent, security-reviewed, and Sybil-resistant oracle nodes run by leading blockchain DevOps teams, data providers, and traditional enterprises with a strong track record for reliability, even during high gas prices and extreme network congestion.
• Decentralized Network — Chainlink Price Feeds are decentralized at the data source, oracle node, and oracle network levels, generating strong protections against downtime and tampering by either the data provider or the oracle network.
• Blockchain Agnostic — Chainlink oracle networks operate at the native speed of the chain where data is being delivered without cross-dependencies on any other blockchain network. Chainlink Price Feeds on Solana have no dependencies on other chains, allowing for high-frequency updates at lower costs.

The integration of Chainlink Price Feeds will allow us to upgrade the security and reliability of Tulip’s oracle mechanism to the industry’s most time-tested and secure solution. Chainlink’s decentralized and high-speed oracles on Solana will be key to making sure unhealthy positions are properly liquidated in real-time, which ultimately helps protect lenders from becoming insolvent and borrowers from faulty liquidations due to inaccurate data or faulty oracle infrastructure.

About Chainlink

Chainlink is the industry standard for building, accessing, and selling oracle services needed to power hybrid smart contracts on any blockchain. Chainlink oracle networks provide smart contracts with a way to reliably connect to any external API and leverage secure off-chain computations for enabling feature-rich applications. Chainlink currently secures tens of billions of dollars across DeFi, insurance, gaming, and other major industries, and offers global enterprises and leading data providers a universal gateway to all blockchains.

About Tulip Protocol

Tulip Protocol is Solana’s yield aggregation homestead, with over $800MM in TVL and 40+ active vaults. Users can also access our lending market with over 15 lending pairs and over 20 leveraged farming pairs.

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