Siren Integrates Multiple Chainlink Services to Enhance the User Experience of Its DeFi Options Protocol
Siren, the DeFi Options Protocol and Vault, is now using Chainlink Keepers to improve the reliability and functionality of Siren vaults and Chainlink Price Feeds to help ensure options are priced correctly. By using Chainlink Keepers, Siren can have stronger assurances around service reliability, helping ensure that liquidity providers can continue to access yields through volatile market conditions and network congestion.
DeFi applications are superior to centralized ones in terms of resiliency and censorship resistance. As DeFi protocols like Siren are governed through the unique model of a DAO, it is beyond the control of any one group. While Web3 technology is still nascent, and at this time lacks some of the features and processes that exist in older paradigms, Chainlink trust-minimized services are helping developers create feature-rich and highly reliable applications.
Chainlink Keepers is a powerful tool for DeFi developers to replicate a similar development environment to ones that centralized developers take for granted. Chainlink Keepers provide a reliable transactiog gas prices based on current network conditions.
Before integrating with Keepers, Siren used various off-chain methods to manage important tasks like updating the implied volatility used to calculate options prices or settling expired contracts — but the infrastructure was brittle and reduced the decentralization of Siren. By integrating with Chainlink Keepers, we can rely on battle-tested infrastructure to perform important automated tasks. We can interact with Chainlink Keepers in a similar way as a developer for a centralized app might interact with a traditional task management system. However, Keepers work in a highly decentralized manner, significantly increasing Siren’s decentralization and reliability.
With Keepers, Siren has improved reliability and reduced the latency of critical protocol functions such as options settlement and pricing, greatly improving the user experience of the decentralized application.
The Decentralized Siren Protocol
The Siren DeFi Options Protocol was created to do for options what Uniswap did for spot trading. Our automated market maker (AMM) seamlessly connects options buyers and sellers on-chain without a traditional inefficient middleman/order book.
The use of the full Black-Scholes model on-chain allows for efficient options price discovery. LPs earn yield on their staked assets as traders pay premiums to buy options. As institutional money continues to enter the space, bringing together options buyers and sellers in an efficient way is central to the growth of DeFi.
Improving Options Settlement with Chainlink Keepers
When options expire, Siren needs to set the settlement price for that expiry date. That settlement price determines the profit and loss of options buyers and sellers. The price is especially important for market makers who might be hedging their large positions on other platforms and require the settlement price to be accurate at all times. Siren relies on Chainlink Price Feeds to supply the protocol with reliable price data.
The Siren protocol needs to execute the settlement process when an options contract expires. Since Siren is a decentralized application, that execution happens by submitting smart contract transactions to the blockchain. Our previous in-house infrastructure to handle automatic settlement was unreliable and caused frustrating delays and a poor user experience. Delegating the settlement tasks to Chainlink Keepers solves our issues in closing out options contracts and improves the reliability of the protocol.
Chainlink Keepers are run by a decentralized network of nodes that are maintained by highly reputable DevOps teams. This provides orders of magnitude higher reliability and uptime guarantees than an in-house solution we used previously. The Siren development team doesn’t need to worry about options settlement performed on time, shortly after options expiration. This frees up valuable engineering resources to focus on core Siren innovation of building infrastructure for DeFi options.
Programmable Options Infrastructure
Currently, Siren provides a DeFi Options Vault for DeFi investors to earn high yields and a trading interface for retail users to buy options contracts on token prices. Siren contributors are using Chainlink Keepers to streamline and improve product development, and as Siren grows and expands into new product lines, we expect contributors to lean on Keepers to help ensure that everything we build has the best possible user experience.
“Chainlink Keepers solve the smart contract automation problem in DeFi. Using Keepers, we’re able to streamline the DeFi options user experience and spend more engineering resources on improving our protocol. We’re excited to continue contributing to the emerging global ecosystem of permissionless financial applications.” — SeaFi, Core protocol dev
About Chainlink
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.
About Siren
Siren is elevating the experience of sourcing sustainable yield and building smart portfolios by bringing battle-tested financial primitives to the world of DeFi.
Liquidity providers can rest easy knowing that they are earning yield on a financial product with sustainable demand. Meanwhile, traders can access market upside while minimizing risks by buying options on tokens with unprecedented ease, control, and protection from liquidation.
Start trading or providing liquidity by visiting Siren.xyz
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