Pendle Integrates Chainlink Price Feeds to Help Secure Liquidity Pool Conversions for Liquid Staking Assets

We’re excited to announce that Pendle — a permissionless yield trading protocol that empowers users to execute sophisticated yield management strategies — has integrated Chainlink Price Feeds on Arbitrum and Optimism mainnets. By integrating the industry-leading Web3 services platform, Pendle now has access to industry-standard pricing data that help secure accurate conversions of ETH liquid staking assets such as rETH and stETH in Pendle Finance’s liquidity pools.

Our initial integration involves the use of the following Chainlink Price Feeds: wstETH/stETH and rETH/ETH. We chose Chainlink as our 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.

Pendle Finance is a cutting-edge DeFi yield management protocol that offers users the ability to separate yield-generating assets into their initial principal and yield. For example, a user can deposit ETH to mint two separate tokens: PT stETH (the ETH principal) and YT stETH (the staking yield for stETH), effectively stripping stETH in the same way as a stripped bond. This enables a host of innovative yield management strategies for sophisticated DeFi users, who can now independently trade and take positions into the dynamic yield offered by staked ETH, cDAI, and other yield-generating digital assets.

In order to help secure accurate conversions in liquidity pools for Pendle’s SY wrappers of rETH and stETH, we needed access to fresh asset prices that are supplied directly on-chain in a highly reliable manner. Fair market asset prices should reflect a volume-weighted average from all trading environments. Thus, we needed to make use of an oracle network to fetch aggregated price data off-chain and deliver it on-chain to be consumed by our application.

After reviewing various oracle solutions, we integrated Chainlink Price Feeds because they provide a multitude of critical features such as:

• High-Quality Data — Chainlink Price Feeds source data from numerous premium data aggregators, leading to price data that’s aggregated from hundreds of exchanges, weighted by volume, and cleaned of outliers and wash trading. Chainlink’s data aggregation model generates more precise global market prices that are inherently resistant to inaccuracies or manipulation of any single or small set of exchanges.
• 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. Chainlink nodes have a strong track record of reliability, even during high gas prices and infrastructure outages.
• 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 oracle network.
• Reputation System — Chainlink provides a robust reputation framework and set of on-chain monitoring tools that allow users to independently verify the historical and real-time performance of node operators and oracle networks.

“Chainlink Price Feeds are the industry standard in security for DeFi, making them the only future-proof pricing solution that we could confidently use to help secure the growing adoption of Pendle’s staked ETH offerings.” — TN Lee, Co-Founder and CEO of Pendle.

About Chainlink

Chainlink is the industry-standard Web3 services platform that has enabled 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 with seamless access to real-world data and off-chain computation across any blockchain and provides global enterprises with a universal gateway to all blockchains.

Learn more about Chainlink by visiting chain.link or reading the developer documentation at docs.chain.link. To discuss an integration, reach out to an expert.

About Pendle Finance

Pendle is a decentralized protocol that enables the tokenization and trading of future yield. As a yield trading protocol, they are bringing one of the largest markets of traditional finance, the interest rate derivative market (worth over $500T in notional value), into DeFi. Pendle helps unlock the full potential of yield, enabling users to execute advanced yield strategies such as fixed yield and long yield.