[Ethereum] Support LINK as collateral on Venus Core Pool

Summary:

This proposal seeks to list the LINK token, the native asset of the Chainlink decentralized oracle network, on the Venus Protocol’s Ethereum Core Pool. Chainlink is a leading provider of decentralized oracles, powering a wide range of decentralized finance (DeFi) applications. Listing LINK on Venus will allow users to utilize their LINK holdings as collateral and borrow other assets, further enhancing liquidity and expanding asset offerings within the Venus ecosystem.

Motivation:

• Liquidity: LINK has strong liquidity on Ethereum mainnet, with over $42m at time of writing.
• Expand the asset diversity on Venus, attracting more users and increasing lending and borrowing activity.
• Strengthen Venus’s position as a key DeFi lending platform by supporting Chainlink, a foundational protocol within the DeFi ecosystem.

Risks

• Volatility Risk: While LINK has a robust use case, its price may still fluctuate, creating the potential for instability on the Venus platform during periods of high volatility.
• Liquidity Risk: Although Chainlink is a well-established protocol, liquidity for LINK could be affected during times of market stress.
• Oracle Dependency: Chainlink’s success is closely tied to the performance of its decentralized oracles. Any significant disruption to the oracle network could negatively impact the token’s value.

Benefits

• Expanded Asset Diversity on Venus: Listing LINK will diversify the collateral options available on Venus, enhancing user flexibility in asset management and risk strategy.
• Increased Utility of the Venus platform: LINK holders can unlock the liquidity of their assets by using LINK as collateral to borrow other tokens on Venus, creating further Defi use cases for Venus’s infrastructure while attracting new users.

Background

Chainlink is a decentralized oracle network that allows smart contracts to securely interact with off-chain data sources, enabling a wide variety of DeFi applications. LINK, the native token, is used to pay for oracle services and acts as collateral to incentivize honest oracle operations. It has become one of the most widely integrated and valuable assets in the DeFi ecosystem.

Venus Protocol, a leading DeFi lending platform, allows users to borrow and lend various Ethereum-based assets. Adding LINK to Venus will enable LINK holders to participate in Venus’s decentralized lending and borrowing markets, while offering Venus users another top-tier asset to engage with.

Specifications

Contract address: 0x514910771AF9Ca656af840dff83E8264EcF986CA

Oracle & Price Feeds: Implementation expected with Redstone

Community Involvement

We recommend that the Venus community support this proposal and, if agreed, request Chaos Labs to analyse and provide risk parameters for the safe integration of LINK into Venus Protocol.

We look forward to the community’s feedback and the successful adoption of LINK.