Paxo Finance Integrates Chainlink
Paxo Finance integrates Chainlink Price Feeds to help power accurate liquidations in the lending protocol. Paxo Finance is an undercollateralized DeFi lending and borrowing protocol.
Integrating the industry-leading decentralized oracle network enables Paxo to access high-quality, tamper-proof price data feeds needed to support accurate liquidations, helping ensure protocol and lender solvency.
The platform chose Chainlink as its go-to oracle solution because its infrastructure is seamless to integrate and time-tested in production. Chainlink already helps secure leading DeFi protocols responsible for tens of billions of dollars in smart contract value, maintaining robust security and high availability even amidst unexpected events, such as exchange downtime, flash crashes, and data manipulation attacks via flash loans.
Increasing Protocol Security and Reliability With Chainlink Price Feeds
Overcollateralized lending is the de facto standard in Web3 because anonymous users and lack of credit history mean lenders have no assurance that borrowers will pay back their loans.
Furthermore, Paxo Finance was created to help users access more capital for less money, while still keeping lender funds secure. They also accomplish this by keeping borrowed funds within the protocol. Borrowers can only transact on Paxo Finance, which effectively eliminates the ability for any borrowed funds to leave the protocol.
Ultimately, this creates a more capital-efficient money market for both lenders and borrowers. Lenders earn higher yields and borrowers can access more capital than they would be able to on other money markets or lending protocols simply by staying and using the Paxo Finance protocol.
Operationally, Paxo Finance works very similarly to other lending protocols in the Web3 space. A borrower pays continuous interest to lenders and must maintain their collateral to stay above the liquidation point. If they fail to, they are liquidated and lender funds are returned to the lending pool.
WHY PAXO FINANCE USES CHAINLINK PRICE FEEDS?
One of the most important components to help ensure a safe and reliable experience for both parties — lenders and borrowers — is using secure, high-quality price data feeds, often considered the lifeblood of DeFi protocols like Paxo Finance. Digital asset prices determine at what point borrowers get liquidated. If the data feed a DeFi protocol is using is unreliable, inaccurate, or manipulatable, borrowers can get liquidated earlier than expected, or lenders’ funds become bad debt.
That’s why Paxo Finance uses Chainlink Price Feeds — the undisputed industry standard for decentralized price data feeds. Chainlink Price Feeds feature multiple layers of aggregation at the data source, oracle node, and oracle networks to help ensure there are no single points of failure and the final price delivered on-chain to DeFi protocols reflects a market-wide average.
“Security is the single most critical aspect of any DeFi protocol, and Chainlink Price Feeds are the best, most widely adopted price data solution in the industry. Here at Paxo Finance, which we know will become one of the leading protocols for borrowers and lenders to interact, we settle for nothing but the best.” — Pranjal Pashar, Founder and CEO of Paxo Finance.
ABOUT Chainlink
Chainlink is the industry-standard Web3 services platform. It also enables trillions of dollars in transaction volume across DeFi, insurance, gaming, NFTs, and other major industries. As the leading decentralized oracle network, Chainlink enables developers to build feature-rich Web3 applications. Offer seamless access to real-world data and off-chain computation across any blockchain and provides global enterprises with a universal gateway to all blockchains.
ABOUT Paxo Finance
Paxo Finance is an undercollateralized investment loan protocol. It allows users to borrow up to 5X of their capital to invest in crypto assets, NFTs, or the metaverse. The protocol also allows liquidity providers to earn high APY by providing liquidity in multiple available pools. The protocol is permissionless and trustless; anyone can use the protocol without KYC or credit check. Paxo is safe and uses a wall-guarded approach to safeguard lenders’ funds.
