Cryptocurrencies like Bitcoin and Ether have traditionally been traded on centralized exchanges like Binance or Kraken. But decentralized trading places such as Uniswap or Serum are currently springing up like mushrooms and can snatch away larger market shares from established players. CEXs and DEXs compete against each other for the fulfillment of digital asset trading.
However, smart contracts and crypto trading on DEXs not only require liquidity and users to function, but also reliable reference prices from the crypto market. Because every blockchain is an encapsulated ecosystem that has no connection to market data that is also as decentralized as possible. So if a smart contract needs the current trade price for ETH-USD, a current and valid trade price is needed.
Oracle Networks Provide Market Data
Market data such as the current Bitcoin price in US dollars or euros are essential for the smart contract ecosystem. While smart contracts can communicate with API endpoints, each API endpoint, unlike the blockchain itself, is a “single point of failure”: it cannot be trusted. Oracle networks like Chainlink solve this problem: the price determination is decentralized and should not be manipulable. As a result, smart contracts receive reliable trading data through an Oracle network. Chainlink hedges markets worth more than $64 billion (as of April 27, 2022).
Market Participants Need Market Data
Reliable trade data is the basis for a large number of applications in the blockchain area. It is precisely for this reason that companies such as BLOCKSIZE CAPITAL use data providers for cryptoassets: this means that it is always clear at what price, for example, a certain cryptocurrency such as SOL-EUR is being traded. BLOCKSIZE CAPITAL offers a high-end infrastructure for analyzing, trading and managing digital assets. The company is also a Chainlink Node Operator itself and supplies market data to the Oracle network. This will feed thousands of blockchain applications with financial data.
Market Data Is Becoming Increasingly Important
With the emergence of more and more CEXs and DEXs comes a desire for greater accessibility to trading data on these exchanges. Therefore, BLOCKSIZE CAPITAL launched a product on May 3, 2022 under my leadership that provides real-time trading data for Chainlink Node Operators and other users: BLOCKSIZE CONNECT.
Using BLOCKSIZE CONNECT users get access to current crypto prices of liquid assets like Bitcoin, Ether, Solana in currencies like EUR, USD, BTC and ETH. The cloud is that this data takes place via a web socket connection and the data is only half a second young. The definition, coordination and development was made possible by several departments and is now carried out via a highly available cloud connection. The data comes not only from CEXs, but also from a number of DEXs. With this, BLOCKSIZE CAPITAL helps to provide the financial system worldwide with reliable trading data. Constant real-time checks are carried out for quality assurance, so that any incorrect data records from the data sources are automatically recognized and filtered out.
About the Author
Michael Wutzke has more than 20 years of experience in IT. His focus is on the conception and development
of digital solutions on the Internet. Michael is currently working in finance in Frankfurt. More about the person
Tags: Bitcoin, BLOCKSIZE CAPITAL, BLOCKSIZE CONNECT, BTC, Chainlink, Chainlink Frankfurt, crypto assets, crypto provider, crypto trading data, data provider, digital assets, ETH, Ether, Frankfurt Chainlink, market data, oracle network, realtime trading data