Chainlink in DeFi: Use Cases

Karolina

12 Feb 2024
Chainlink in DeFi: Use Cases

DeFi is transforming the financial sector by making it accessible to everyone, bypassing traditional institutions. It leverages blockchain to offer financial products widely, improving transparency and security through smart contracts.

At the heart of DeFi's functionality and its promise of creating more trustworthy financial applications lies Chainlink's oracle technology. Chainlink oracles are pivotal in bridging the gap between blockchain smart contracts and the external world, enabling these contracts to interact with real-world data in a secure and reliable manner. This critical integration allows for the execution of complex financial products and services within the DeFi ecosystem.

Decentralized Finance (DeFi) Overview

DeFi represents a paradigm shift in the financial industry, aiming to remove the barriers and inefficiencies associated with traditional finance. By utilizing blockchain technology and smart contracts, DeFi platforms offer a plethora of financial services. This not only makes financial products more accessible to a global audience but also significantly reduces the costs and complexities involved in financial transactions.

One of the most compelling promises of DeFi is its potential to provide universal financial accessibility. In traditional finance, services are often restricted to those with a bank account or sufficient capital. DeFi opens the doors to anyone with an internet connection. However, this revolutionary approach does not come without its challenges. Traditional finance systems are plagued by issues like gatekeeping, where powerful entities control access to financial services, and counterparty risk. The trustworthiness of one party can jeopardize the execution of financial agreements. DeFi seeks to address these problems by offering a transparent, permissionless, and trustless financial ecosystem.

MUST READ: "DeFi and the Future of Finance"

Chainlink's Impact Across DeFi Protocols

Money Markets

In the realm of DeFi, money markets offer platforms where users can lend and borrow cryptocurrencies, earning interest on assets or paying interest for loans. The accuracy of asset valuation is paramount in these platforms to maintain solvency and ensure fair and secure transactions.

  • Chainlink's Role. Money market protocols like Aave, Compound, and Liquity can access real-time data by integrating Chainlink Price Feeds. This data is crucial for calculating the value of collateral and debt. It determines interest rates, and triggering liquidations for undercollateralized loans, thereby safeguarding the protocol and its users' assets.

Decentralized Stablecoins

Stablecoins are a cornerstone of the DeFi ecosystem, providing a stable medium of exchange and store of value. Decentralized stablecoins, in particular, rely heavily on accurate and timely price information to maintain their peg to fiat currencies.

  • Chainlink's Contribution. For decentralized stablecoin platforms like DeFiDollar, Chainlink Price Feeds are indispensable for monitoring the value of underlying assets (such as sUSD, USDT, DAI, and USDC). This enables these platforms to execute rebalancing actions efficiently and maintain their stable value, even amidst volatile market conditions.

Algorithmic Stablecoins

Algorithmic stablecoins use a combination of incentives and monetary policy mechanisms to maintain their peg to other currencies without relying solely on collateral. The success of these mechanisms hinges on accurate and reliable market data.

  • Implementation by Chainlink. Projects like Fei Protocol utilize Chainlink Price Feeds to adjust their algorithms in response to real-time market conditions, ensuring their stablecoins remain close to their target peg, thus maintaining stability and user confidence.

Futures and Perpetual Contracts

Futures and perpetual contracts allow users to speculate on the future prices of assets or hedge against price movements, requiring precise and up-to-date asset pricing for fair contract settlement and liquidation.

  • Chainlink's Utility. Protocols such as Lyra and MCDEX leverage Chainlink Price Feeds for determining the settlement prices of futures contracts and the real-time valuation of assets for perpetual contracts. This ensures that these financial instruments operate transparently and fairly, with all parties confident in the integrity of their trades.

Synthetic Assets

Synthetic assets enable users to gain exposure to a variety of real-world assets, indices, and commodities within the blockchain space. The creation and trading of these assets depend on accurate price information to mirror the real-world market values.

  • Chainlink's Role. Synthetix is a prime example of a protocol that uses Chainlink Price Feeds to mint and trade synthetic assets. By providing reliable access to real-time price data, Chainlink enables Synthetix users to create and exchange synthetic assets that accurately reflect the value of their real-world counterparts.

MUST READ: "What is Chainlink"

Enhancing DeFi with Accurate Data (Chainlink)

Chainlink's integration across the DeFi ecosystem is transforming how financial protocols operate, providing them with the critical infrastructure for secure and efficient interaction with real-world data. From money markets to synthetic assets, Chainlink ensures accuracy, fairness, and transparency, underpinning the trust and reliability essential for DeFi's operation and growth.

Key Takeaways - Chainlink

Chainlink Decentralized Finance

Conclusion DeFi

Chainlink is instrumental in DeFi's evolution, offering a bridge to real-world data that's essential for the ecosystem's functionality and trust. By enabling complex financial instruments on the blockchain, Chainlink not only fosters innovation within DeFi but also ensures that these advancements are built on a foundation of accuracy and transparency. As DeFi grows, Chainlink's role as a trusted data provider will continue to be central to its success and expansion, ensuring a more inclusive and fair financial system.

If you are interested in utilizing Chainlink or other blockchain-based solutions for your project, please reach out to contact@nextrope.com

DeFi Staking Revolution by Nextrope

FAQ

What role does Chainlink play in the operation of decentralized stablecoins?

  • Chainlink Price Feeds offer essential price information for platforms like DeFiDollar, enabling them to maintain stable values even in volatile markets.

How do algorithmic stablecoins benefit from Chainlink's technology?

  • Chainlink Price Feeds help projects like Fei Protocol adjust their algorithms according to market conditions, ensuring stablecoin pegs are maintained.

How does Chainlink ensure the reliability and security of its data feeds?

  • An exploration of the mechanisms Chainlink employs to protect against manipulation and ensure the accuracy and timeliness of its data feeds could be of interest.

More about this Topic on Nextrope Blog

  1. What is Chainlink?
  2. Chainlink vs Polkadot
  3. NFT and Gaming: Chainlink Use Cases
  4. Chainlink vs. Avalanche: Exploring the Blockchain Frontier
  5. Authorization and Identity: Chainlink Use Cases
  6. Chainlink and On-Chain Finance Use Cases

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AI in Real Estate: How Does It Support the Housing Market?

Miłosz Mach

18 Mar 2025
AI in Real Estate: How Does It Support the Housing Market?

The digital transformation is reshaping numerous sectors of the economy, and real estate is no exception. By 2025, AI will no longer be a mere gadget but a powerful tool that facilitates customer interactions, streamlines decision-making processes, and optimizes sales operations. Simultaneously, blockchain technology ensures security, transparency, and scalability in transactions. With this article, we launch a series of publications exploring AI in business, focusing today on the application of artificial intelligence within the real estate industry.

AI vs. Tradition: Key Implementations of AI in Real Estate

Designing, selling, and managing properties—traditional methods are increasingly giving way to data-driven decision-making.

Breakthroughs in Customer Service

AI-powered chatbots and virtual assistants are revolutionizing how companies interact with their customers. These tools handle hundreds of inquiries simultaneously, personalize offers, and guide clients through the purchasing process. Implementing AI agents can lead to higher-quality leads for developers and automate responses to most standard customer queries. However, technical challenges in deploying such systems include:

  • Integration with existing real estate databases: Chatbots must have access to up-to-date listings, prices, and availability.
  • Personalization of communication: Systems must adapt their interactions to individual customer needs.
  • Management of industry-specific knowledge: Chatbots require specialized expertise about local real estate markets.

Advanced Data Analysis

Cognitive AI systems utilize deep learning to analyze complex relationships within the real estate market, such as macroeconomic trends, local zoning plans, and user behavior on social media platforms. Deploying such solutions necessitates:

  • Collecting high-quality historical data.
  • Building infrastructure for real-time data processing.
  • Developing appropriate machine learning models.
  • Continuously monitoring and updating models based on new data.

Intelligent Design

Generative artificial intelligence is revolutionizing architectural design. These advanced algorithms can produce dozens of building design variants that account for site constraints, legal requirements, energy efficiency considerations, and aesthetic preferences.

Optimizing Building Energy Efficiency

Smart building management systems (BMS) leverage AI to optimize energy consumption while maintaining resident comfort. Reinforcement learning algorithms analyze data from temperature, humidity, and air quality sensors to adjust heating, cooling, and ventilation parameters effectively.

Integration of AI with Blockchain in Real Estate

The convergence of AI with blockchain technology opens up new possibilities for the real estate sector. Blockchain is a distributed database where information is stored in immutable "blocks." It ensures transaction security and data transparency while AI analyzes these data points to derive actionable insights. In practice, this means that ownership histories, all transactions, and property modifications are recorded in an unalterable format, with AI aiding in interpreting these records and informing decision-making processes.

AI has the potential to bring significant value to the real estate sector—estimated between $110 billion and $180 billion by experts at McKinsey & Company.

Key development directions over the coming years include:

  • Autonomous negotiation systems: AI agents equipped with game theory strategies capable of conducting complex negotiations.
  • AI in urban planning: Algorithms designed to plan city development and optimize spatial allocation.
  • Property tokenization: Leveraging blockchain technology to divide properties into digital tokens that enable fractional investment opportunities.

Conclusion

For companies today, the question is no longer "if" but "how" to implement AI to maximize benefits and enhance competitiveness. A strategic approach begins with identifying specific business challenges followed by selecting appropriate technologies.

What values could AI potentially bring to your organization?
  • Reduction of operational costs through automation
  • Enhanced customer experience and shorter transaction times
  • Increased accuracy in forecasts and valuations, minimizing business risks
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Want to implement AI in your real estate business?

Nextrope specializes in implementing AI and blockchain solutions tailored to specific business needs. Our expertise allows us to:

  • Create intelligent chatbots that serve customers 24/7
  • Implement analytical systems for property valuation
  • Build secure blockchain solutions for real estate transactions
Schedule a free consultation

Or check out other articles from the "AI in Business" series

AI-Driven Frontend Automation: Elevating Developer Productivity to New Heights

Gracjan Prusik

11 Mar 2025
AI-Driven Frontend Automation: Elevating Developer Productivity to New Heights

AI Revolution in the Frontend Developer's Workshop

In today's world, programming without AI support means giving up a powerful tool that radically increases a developer's productivity and efficiency. For the modern developer, AI in frontend automation is not just a curiosity, but a key tool that enhances productivity. From automatically generating components, to refactoring, and testing – AI tools are fundamentally changing our daily work, allowing us to focus on the creative aspects of programming instead of the tedious task of writing repetitive code. In this article, I will show how these tools are most commonly used to work faster, smarter, and with greater satisfaction.

This post kicks off a series dedicated to the use of AI in frontend automation, where we will analyze and discuss specific tools, techniques, and practical use cases of AI that help developers in their everyday tasks.

AI in Frontend Automation – How It Helps with Code Refactoring

One of the most common uses of AI is improving code quality and finding errors. These tools can analyze code and suggest optimizations. As a result, we will be able to write code much faster and significantly reduce the risk of human error.

How AI Saves Us from Frustrating Bugs

Imagine this situation: you spend hours debugging an application, not understanding why data isn't being fetched. Everything seems correct, the syntax is fine, yet something isn't working. Often, the problem lies in small details that are hard to catch when reviewing the code.

Let’s take a look at an example:

function fetchData() {
    fetch("htts://jsonplaceholder.typicode.com/posts")
      .then((response) => response.json())
      .then((data) => console.log(data))
      .catch((error) => console.error(error));
}

At first glance, the code looks correct. However, upon running it, no data is retrieved. Why? There’s a typo in the URL – "htts" instead of "https." This is a classic example of an error that could cost a developer hours of frustrating debugging.

When we ask AI to refactor this code, not only will we receive a more readable version using newer patterns (async/await), but also – and most importantly – AI will automatically detect and fix the typo in the URL:

async function fetchPosts() {
    try {
      const response = await fetch(
        "https://jsonplaceholder.typicode.com/posts"
      );
      const data = await response.json();
      console.log(data);
    } catch (error) {
      console.error(error);
    }
}

How AI in Frontend Automation Speeds Up UI Creation

One of the most obvious applications of AI in frontend development is generating UI components. Tools like GitHub Copilot, ChatGPT, or Claude can generate component code based on a short description or an image provided to them.

With these tools, we can create complex user interfaces in just a few seconds. Generating a complete, functional UI component often takes less than a minute. Furthermore, the generated code is typically error-free, includes appropriate animations, and is fully responsive, adapting to different screen sizes. It is important to describe exactly what we expect.

Here’s a view generated by Claude after entering the request: “Based on the loaded data, display posts. The page should be responsive. The main colors are: #CCFF89, #151515, and #E4E4E4.”

Generated posts view

AI in Code Analysis and Understanding

AI can analyze existing code and help understand it, which is particularly useful in large, complex projects or code written by someone else.

Example: Generating a summary of a function's behavior

Let’s assume we have a function for processing user data, the workings of which we don’t understand at first glance. AI can analyze the code and generate a readable explanation:

function processUserData(users) {
  return users
    .filter(user => user.isActive) // Checks the `isActive` value for each user and keeps only the objects where `isActive` is true
    .map(user => ({ 
      id: user.id, // Retrieves the `id` value from each user object
      name: `${user.firstName} ${user.lastName}`, // Creates a new string by combining `firstName` and `lastName`
      email: user.email.toLowerCase(), // Converts the email address to lowercase
    }));
}

In this case, AI not only summarizes the code's functionality but also breaks down individual operations into easier-to-understand segments.

AI in Frontend Automation – Translations and Error Detection

Every frontend developer knows that programming isn’t just about creatively building interfaces—it also involves many repetitive, tedious tasks. One of these is implementing translations for multilingual applications (i18n). Adding translations for each key in JSON files and then verifying them can be time-consuming and error-prone.

However, AI can significantly speed up this process. Using ChatGPT, DeepSeek, or Claude allows for automatic generation of translations for the user interface, as well as detecting linguistic and stylistic errors.

Example:

We have a translation file in JSON format:

{
  "welcome_message": "Welcome to our application!",
  "logout_button": "Log out",
  "error_message": "Something went wrong. Please try again later."
}

AI can automatically generate its Polish version:

{
  "welcome_message": "Witaj w naszej aplikacji!",
  "logout_button": "Wyloguj się",
  "error_message": "Coś poszło nie tak. Spróbuj ponownie później."
}

Moreover, AI can detect spelling errors or inconsistencies in translations. For example, if one part of the application uses "Log out" and another says "Exit," AI can suggest unifying the terminology.

This type of automation not only saves time but also minimizes the risk of human errors. And this is just one example – AI also assists in generating documentation, writing tests, and optimizing performance, which we will discuss in upcoming articles.

Summary

Artificial intelligence is transforming the way frontend developers work daily. From generating components and refactoring code to detecting errors, automating testing, and documentation—AI significantly accelerates and streamlines the development process. Without these tools, we would lose a lot of valuable time, which we certainly want to avoid.

In the next parts of this series, we will cover topics such as:

Stay tuned to keep up with the latest insights!