We’re excited to announce that Y2K Finance — a suite of products for hedging positions surrounding pegged assets — has integrated Chainlink Price Feeds on Arbitrum mainnet. By integrating the industry-leading decentralized oracle network, Y2K has access to high-quality, tamper-proof price feeds needed to help underpin Earthquake vault liquidations on-chain. This will provide our users with stronger assurances that they will receive instant payouts in the event of a depeg using only the most precise and reliable price feeds provided by the Chainlink Network.
Our initial integration involves the use of the following Chainlink Price Feeds: DAI/USD, USDC/USD, USDT/USD, MIM/USD, and FRAX/USD. 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.
Y2K Finance is a novel marketplace for users to hedge the possibility of depeg events for not just stablecoins, but other pegged assets like the stETH derivative. Y2K will offer several products, our staple being the Earthquake depeg vaults. Earthquake vaults have two sets of participants: those anticipating a depeg and those confident in peg strength. Every epoch, each side picks a strike price and receives a payout depending on if the underlying vault asset depegs below the strike. Y2K also features other products such as the Tsunami MEV-capturing GLP-style product and the Wildfire secondary market for trading Earthquake risk positions during an epoch.
In order to help accurately settle Earthquake vault payouts, 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.
Looking to the future, Y2K plans to expand its integration of Chainlink Price Feeds to other pegged assets like stETH. Any announcements on future assets that will be supported can be found on the Y2K Medium.
Chainlink is the industry standard for building, accessing, and selling oracle services needed to power hybrid smart contracts on any blockchain. Chainlink oracle networks provide smart contracts with a way to reliably connect to any external API and leverage secure off-chain computations for enabling feature-rich applications. Chainlink currently secures tens of billions of dollars across DeFi, insurance, gaming, and other major industries, and offers global enterprises and leading data providers 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.
At Y2K, users can approach multiple risk positions on a variety of pegged assets in order to hedge or profit off of a pegged assets performance during an epoch. Whether it be stablecoins, pegged derivatives, or liquid wrappers, Y2K’s product stack will be extremely efficient for trading and anticipating market movements for all types of pegged assets.
Our primary product is Earthquake, offering vaults for users to play either side of various pegged assets. Users can hedge against a depeg occurring by paying a premium on their deposit every epoch, and are paid out in the event their vault’s asset depegs below their chosen strike. On the other hand, users can deposit collateral that will be liquidated in the event of a depeg below their strike, but receive premium payments every epoch.
The Wildfire market will be a secondary trading outlet for exchanging tokenized Earthquake vault positions. The Tsunami GLP-style product is still in development, and will pass down yield from MEV captured in market operations such as auctioning order flow and arbitraging pegged collateral.