Leading decentralized oracle network Chainlink has launched a new infrastructure called Data Streams on Layer 2 chain Arbitrum to provide high-speed market data to DeFi applications.
Data Streams combines low-latency oracles and automated smart contract execution to enable real-time access to off-chain data that powers next-generation DeFi services.
The first integration of Chainlink Data Streams is on Arbitrum, with decentralized trading platform GMX utilizing it currently for futures markets.
Supercharging DeFi With Real-Time Data
Chainlink Data Streams introduces two major innovations:
- Low-latency oracles that relay off-chain data via optimized architecture for minimal delay. This serves streams of real-time price updates to DeFi apps.
- Automated execution of transactions triggered by price changes as dictated by pre-set parameters. This allows real-time trading as prices fluctuate.
Together, this infrastructure provides the speed and automation necessary for high-frequency DeFi trading similar to centralized exchanges – while preserving security through decentralization.
Next Generation of DeFi Markets
Data Streams unlocks new capabilities like sub-second swap execution, futures trading, market making, arbitrage opportunities, and more for DeFi protocols by bridging them to real-time external data flow.
GMX leverages Data Streams currently to offer decentralized futures markets across various trading pairs on Arbitrum.
According to Chainlink, Data Streams provides users with “fair execution on trades and protection from toxic flow, frontrunning, and adverse selection” – issues plaguing DeFi.
As Data Streams expands across more networks, next-generation DeFi markets built on real-time, tamper-proof data access can scale efficiently while retaining decentralization – a major innovation for the ecosystem.