Alpha Oracle Aggregator: One Month in Review and Expansion Plans
Alpha Finance has established an open working relationship with Band Protocol to connect and support interested DeFi teams to integrate with Band Oracles and on-chain price feeds such as Uniswap and Sushiswap in a permissionless manner via Alpha Oracle Aggregator.
Alpha Finance Lab launched the Alpha Oracle Aggregator on May 10 2021 in partnership with the two leading oracle providers in the DeFi industry to prepare Alpha for the next stage of growth and innovation. This strengthened the security and scalability aspects of Alpha Homora, allowing the protocol to navigate safely through Black Wednesday where Ethereum gas prices surpassed 2000 gwei and rendered many applications unusable.
With popular demand from DeFi projects and the proven benefits of using the Alpha Oracle Aggregator to alleviate dependencies on a sole solution, we are proud to announce that Alpha Finance has established an open working relationship with Band Protocol to connect and support interested DeFi teams to integrate their oracles in a permissionless manner.
How Developers Can Use Alpha Oracle Aggregator
For teams building in DeFi, there’s a common issue where a price feed for their native token from an external oracle is susceptible to price manipulation due to the lack of exchange support or trading limited to decentralized exchanges. This means the DeFi composability with partners or collaborators are strictly limited or unviable due to the exposed surface area of risk derived from manipulatable price sources or single points of failure. Teams can add Alpha Oracle Aggregator into their list of oracles to ensure a more reliable price feed and reduce risks from over-reliance on a single provider.
DeFi moves rapidly, with many teams opting to use on-chain price feeds to favour speed-to-market at the compromise of security and market coverage. The Alpha Oracle Aggregator enables, for the first time, both decentralized oracles provided by Band Protocol and on-chain oracles to be used synchronously without heavy engineering requirements - a plug and play solution.
Similarly for Band Protocol’s rapidly growing number of partners and integrations, accessibility to on-chain price sources from the leading decentralized exchanges will significantly enhance market coverage and the degree of security of existing price oracles.
This way, Alpha Oracle Aggregator will be able to support the wider innovation of the industry.
Reflecting on Alpha Oracle Aggregator
Decentralized applications and projects face a common dilemma when expanding cross-chain or enhancing middleware - what oracle should be integrated for decentralization and security.
With leading oracle solutions and frameworks which offer key benefits such as differentiating levels of decentralization and aggregation logic - the Alpha Oracle Aggregator ensures that DApps can mitigate situations where an oracle may be temporarily unavailable or compromised. This is achieved by referencing the output price with a predetermined threshold of at least two sources to detect discrepancies and provide a reliable price feed at all times.
Since upgrading Alpha’s internal oracle mechanism to the Alpha Oracle Aggregator, we’ve seen the solution navigate around sudden events and unforeseen gas spikes without any incidents. The increase in reliability and security alongside the flexibility offered to leverage the benefits of each oracle network proves to be valuable and positively received among the leading DeFi projects.
Expanding Alpha Oracle Aggregator
While the Alpha Oracle Aggregator and the underlying oracles supported, are agreed on a case-by-case basis with the respective teams, we are proud to announce that Band Protocol has established an open working relationship with Alpha Finance to connect and support interested DeFi teams to integrate their oracles in a permissionless manner.
This means that DeFi teams can build a custom oracle using Band Protocol framework with end-to-end flexibility and customizability to use in the Alpha Oracle Aggregator where support will expand to on-chain price feeds and TWAP oracles from the likes of Uniswap, Sushiswap, Keeper and more! Support for customization of these specific oracles in the aggregator is currently still in production. However, interested teams can begin scoping out the details immediately with the Band Protocol team to be integration-ready once the support is available.
With the strategic support provided by Band Protocol, their team will be working directly with the users of the Alpha Oracle Aggregator to support the oracle design and implementation. This includes working with new projects and teams to create a refined and robust price feed oracle for a new asset which may not have strong liquidity or extensive market sources. Decentralized protocols finally have an avenue to aggregate on-chain and external price feeds without major changes to infrastructure or codebases.
Closing Remarks
As we continue to work with teams to use Band Protocol and TWAP oracles such as Uniswap, Sushiswap, and more, we will soon provide developer documentation for teams looking to integrate to bring about the best experience as possible and contribute to the rapid growth in DeFi.
Stay tuned!
About Alpha Finance Lab
Alpha Finance Lab is a DeFi Lab and on a mission to build an ecosystem of DeFi products (the Alpha ecosystem), consisting of innovative building blocks that capture unaddressed demand in key pillars of the financial system. These building blocks will interoperate, creating the Alpha ecosystem that will be an innovative and more capital efficient way to banking in DeFi.
Alpha Homora is Alpha Finance Lab’s first product and DeFi’s first leveraged yield farming product that captures the market gap in lending, one of the key pillars of the financial system.
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