Pendle Finance uses Chainlink price feeds to improve yield management on the Arbitrum and Optimism mainnets

Per the latest blog post, Pendle Finance — a permissionless yield trading protocol — has announced its integration with Chainlink Price Feeds on the Arbitrum and Optimism mainnets. The goal of the collaboration is to further solidify Pendle’s position as a leader in providing sophisticated revenue management strategies for crypto traders and liquidity providers.

Pendle leverages Chainlink’s robust Oracle infrastructure

Pendle has integrated Chainlink price feeds into the Arbitrum and Optimism mainnets. By syncing with Chainlink, the market-leading Web3 service provider, Pendle has gained a crucial edge and armed itself with industry-standard pricing data. This crucial partnership aims to ensure accurate conversion of liquid ETH assets, specifically rETH and stETH, within Pendle Finance’s liquidity pools.

As part of the first collaboration, Pendle Finance has opted for specific Chainlink price feeds: wstETH/stETH and rETH/ETH. Chainlink is known for its seamless, easy-to-integrate architecture, which has been thoroughly validated in live production environments.

It is responsible for securing some of the leading protocols in the DeFi space, which collectively manage tens of billions of dollars in smart contract value. Even in volatile scenarios like stock market failures, flash crashes or data manipulation attempts via flash loans, Chainlink has maintained its robust security and high availability.

Pendle Finance offers a unique feature that allows users to split yield-generating assets into their original principal amount and the yield generated. By depositing ETH, users can mint two specific tokens: PT stETH for principal and YT stETH for income. This mechanism, similar to the concept of stripped bonds, opens up a wide range of advanced yield management strategies. It allows users to trade and invest in the returns of assets like pledged ETH and cDAI without impacting their capital.

Pendle relies on Chainlink’s decentralized oracles for reliable real-time price data, ensuring safe and accurate asset conversions in its liquidity pools.

Chainlink’s high-quality data is attracting DeFi projects

One of Chainlink’s outstanding features is the quality of the data it offers. Chainlink price feeds source information from a variety of premium data aggregators. This ensures that price data from hundreds of exchanges is aggregated, weighted by trading volume, and carefully cleaned to remove outliers and clean up trading. This results in highly accurate global market prices that resist any manipulation or inaccuracy that might be introduced by a single exchange or small group of exchanges.

Additionally, Chainlink price feeds are secured by a network of independent Sybil-resistant Oracle nodes that have undergone rigorous security reviews. These nodes are operated by leading blockchain DevOps teams, data providers and traditional companies. Impressively, Chainlink’s nodes have a strong reliability record even under challenging conditions such as high gas prices and infrastructure outages.

TN Lee, Pendle Co-Founder and CEO, said, “Chainlink price feeds are the industry standard for DeFi security, making it the only future-proof pricing solution that we can confidently leverage to ensure the growing adoption of Pendle’s staked ETH offerings .”

The Chainlink price feeds benefit from being part of a decentralized network at multiple levels – from the data sources to the oracle nodes and the broader oracle network. This multi-layered decentralization offers robust protection against potential downtime and tampering, whether by the data provider or the Oracle network itself. In addition, Chainlink offers a robust reputation system and on-chain monitoring tools, allowing users and developers to see past and current performance independently assess its Oracle nodes and networks.

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