GMX Tokenholders Vote for Chainlink Oracles
Over 96% of GMX tokenholders voted in favor of using Chainlink’s low-latency oracles. These oracles will be integrated into GMX v2 to provide more granular real-time market data and improve the security of the decentralized exchange. The new oracles were developed in collaboration with GMX core contributors.
Enhanced Security and Decentralization
Johann Eid, the head of integration at Chainlink Labs, states that the low-latency oracles will increase the tamper-resistance of GMX when settling user trades, which strengthens the overall security of the platform. The oracles will also further decentralize the protocol, contributing to a better user experience.
Meeting DeFi Speed Requirements
Chainlink’s low-latency oracles use the same oracle node operators and data aggregation mechanisms as their existing reference feeds but operate at a higher frequency. This pull-based mechanism is designed to meet the speed requirements of DeFi derivatives trading.
Reducing Exposure to Stale Prices
The integration of Chainlink’s low-latency oracles will reduce the exposure to stale price execution and value extraction for GMX derivative traders, according to Twitter commentator Aylo. A beta version of these oracles tailored to GMX is already available on the Arbitrum testnet.
Chainlink’s Compensation
In return for their services, Chainlink will receive 1.2% of protocol fees generated by the low-latency oracles from the GMX protocol. These fees include margin trading fees, borrow fees, and swap fees. Chainlink plans to continue refining its oracle services as GMX evolves and expands.
Not the First DEX to Use Low-Latency Oracles
GMX is not the first perpetual DEX to adopt low-latency oracles. Synthetix, an on-chain derivatives platform, integrated a similar solution earlier. GMX, which launched on Avalanche in January 2022, currently has a combined total value locked of $669 million across the two networks.
Conclusion
The integration of Chainlink’s low-latency oracles into GMX marks a significant step forward for the decentralized exchange, enhancing security and user experience while also meeting the demands of DeFi derivatives trading. As more DEXs adopt these advanced oracles, the overall efficiency and reliability of the DeFi ecosystem will continue to improve, attracting more users and fostering further growth in the sector. This collaboration between GMX and Chainlink demonstrates the power of innovative solutions in addressing the evolving needs of the rapidly expanding decentralized finance landscape.
