The two teams received a grant from the Tezos Foundation to integrate Chainlink oracles into Tezos smart contracts. Cryptonomic co-founder Vishakh told Cointelegraph that their work has filled a key missing link within the Tezos ecosystem:
“Most of our core team has worked in finance for multiple years, especially derivatives finance. We’ve worked on mission-critical systems that handle very high notional financial trades. So that's why we're really attracted to Tezos because of on-chain governance and formal verification. But one missing piece of the puzzle, there have to be external inputs in order to build successful Tezos DeFi applications.”
An oracle is a prerequisite for decentralized finance
Speaking to Cointelegraph, Chainlink CEO Sergey Nazarov echoed the same sentiment, noting the importance of resilient data feeds for the decentralized finance — or DeFi — space:
“I think it's going to be used a lot for DeFi, maybe some decentralized insurance. But from what I can tell, there's a lot of interest in having DeFi on Tezos. And having a good oracle mechanism is basically now a prerequisite for having a well functioning DeFi application. And I think people are starting to realize that building oracle mechanisms is akin to building a blockchain.”
Nazarov said that the integration between the two crypto unicorns benefits other projects as well:
“It's a network effect that compels data providers to put data on-chain because there's more of a market share that they get access to with one integration. And while we will be on multiple chains, every additional chain that we're on creates a benefit to all the other chains, because now data providers have more of a market to sell data to.”
Recent vulnerabilities demonstrated by various DeFi projects seem to indicate that Chainlink will not run out of companies in search of an oracle.