GMX, the largest decentralized perpetual exchange operating on Arbitrum and Avalanche, has announced its partnership with Chainlink, the industry-standard Web3 services platform, to integrate Chainlink’s new low-latency oracles for financial market data.
This integration will be the launch partner for Chainlink’s new solution, integrating the low-latency oracles in its upcoming protocol GMX V2 to support perpetual, swaps, and liquidity.
Low-Latency Oracles: A Major Innovation for DeFi
Chainlink’s new low-latency oracles are a major innovation that addresses a significant DeFi pain point: the extreme latency sensitivity of derivatives exchanges and other price-sensitive DeFi applications.
The low-latency oracles provide secure access to high-quality market data in a pull-based manner, all while keeping Chainlink’s industry standard and battle-tested infrastructure, where data is cryptographically signed by a decentralized oracle network and verified on-chain.
Benefits of Integration for GMX
The integration of low-latency oracles is set to enhance the decentralized exchange’s performance, harden its data security, help mitigate the risks of frontrunning, and provide long-term sustainable access to essential Web3 infrastructure. Testing by GMX core contributors is ongoing, with the Arbitrum testnet having a beta version of the low-latency oracle already deployed.
A Transformational Moment for the Maturity and Economic Sustainability of Web3
The collaboration between GMX and Chainlink marks a transformational moment for the maturity and economic sustainability of Web3 through the creation of a sustainable financial framework. A fee structure will be established in which 1.2% of total fees generated by GMX V2 and later protocol versions will be paid to Chainlink service providers in exchange for the usage of the low-latency oracles and technical support.
Importance of Addressing Latency Challenges in Web3
The passing of this proposal represents a major step forward for oracle sustainability as Chainlink continues to deliver on its Economics 2.0 vision, following other programs such as SCALE and BUILD. With the low-latency oracles, the industry is one step closer to the performance level that currently exists outside of it, while the economic alignment helps set the foundation for a more sustainable ecosystem.
Conclusion: Importance of Oracles in the DeFi Ecosystem
Oracles play a crucial role in the DeFi ecosystem by providing reliable and accurate off-chain data to on-chain smart contracts. Chainlink’s innovative low-latency oracles have addressed the DeFi pain point of extreme latency sensitivity, bringing the industry one step closer to the performance level that currently exists outside of it.
As a result, collaborations between industry-leading projects such as GMX and Chainlink are driving the growth and maturity of Web3 toward mass adoption, paving the way for a more sustainable ecosystem.
