Fetch Commodity Prices in Solidity Smart Contracts

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Fetch Commodity Prices in Solidity Smart Contracts

Secure, up-to-date price data is the centerpiece of many financial applications, often used to trigger transactions and derive other instruments and products, especially in decentralized finance (DeFi) protocols. Synthetic tokens based on commodity price data are of major interest within the DeFi space for creating decentralized options, futures, and other complex derivatives. In addition to fetching secure cryptocurrency price data, Chainlink Data Feeds can also be used to get high-quality commodity price data in your smart contracts so you can launch these more sophisticated financial products.

In this technical tutorial, we’ll walk through how you can use Chainlink Commodity Data Feeds in your Solidity smart contracts. First, let’s quickly go over what commodity feeds are and what types of derivatives can be created by using them.

What Are Commodity Data Feeds?

The commodity exchange market is a global market for the trading of raw products such as gold and oil. Due to the high volume and popularity of this market, many DeFi applications use Chainlink Commodity Data Feeds to ensure that commodity price data is delivered to their derivatives contracts in a secure and decentralized manner, without any single point of failure.

For example, Synthetix Exchange, a leading DeFi derivatives exchange, uses several commodity price feeds provided by Chainlink oracles to ensure tamper-proof and accurate valuations in accordance with the real-world market price of their underlying assets, even during times of high volatility.

Fetch Commodity Prices in Solidity Smart Contracts
How Synthetix Exchange uses Chainlink oracles to obtain real-time market data of various commodities.

Chainlink Data Feeds use hundreds of high-quality data sources and aggregate them through a decentralized network of Chainlink oracles that feed price data into reference contracts, where the results are again aggregated in an Aggregator Smart Contract as the latest, trusted answer. By using ...

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