Chainlink (LINK) Price Feeds on Solana Mainnet Good for DeFi and High Frequency Trading

Chainlink price feeds are now live on Solana mainnet.  Thus, Chainlink oracles are natively integrated on Solana’s high-speed blockchain.  Developers now have access to the most proven oracle infrastructure for building secure and scalable Web3 apps, particularly for DeFi.

Chainlink Price Feeds provide for highly decentralized, high-quality, and near real-time price updates, making it possible to build a new realm of hybrid smart contract applications, which provide for superior performance around trade execution and risk management.  During the following months, several hundreds of additional Chainlink Price Feeds and other Chainlink oracle services will be made available to Solana developers to progress towards the next stages of integration.

Anatoly Yakovenko, co-founder of Solana expressed, “Solana’s high-speed blockchain can deliver high-frequency pricing data to Dapps, enabling developers to build new DeFi Dapps and products.”

High frequency pricing data refers to time-series data which is collected at an extremely fine scale using advanced computational power.  The data is efficient for financial analysis and is applicable in high frequency trading.  The high frequency data provides intraday observations which can be used to understand market behaviours, dynamics, and micro-structures.  Each single ‘event’ transaction, quote, price movement, etc. as a logical unit of information is collected and processed accordingly.

High frequency data collections provide for high statistical precision. The high frequency observations across one day of a liquid market will be able to equal the amount of daily data which has been collected in 30 years.

DeFi is high frequency trading.  There is a need for high speeds, high turnover rates, and high order to trade ratios which will help leverage high frequency financial data and electronic trading tools to make profits.  When investors are looking for profits in short-term investment horizons while trading with proprietary trading strategies while moving in and out of positions in seconds or just fractions of seconds there is a need for reliable price feed and Chainlink is undeniably the industry leader providing for quality and accuracy.

High frequency traders move in and out of short-term positions in high volumes and speeds focusing to capture a fraction of a cent in profit on each trade.  HFT trading does not accumulate positions or hold positions overnight.  High Frequency Traders Compete not with long-term investors but with other High Frequency Traders. These traders contribute to the bulk of the volatility in the market.  Since the holding periods are short and the volumes traded are high these trading strategies focus on minute deviations from the market equilibrium.  To be profitable, high accuracy of data is required and Chainlink oracle provides just that.

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