After a technical malfunction caused the listed price of multiple securities on the New York Stock Exchange to drop by almost 100%, Sergey Nazarov, the co-founder and CEO of Chainlink (LINK), emphasized that traditional financial systems are susceptible to significant vulnerabilities due to their centralized nature.
Nazarov stated to Cointelegraph that Chainlink’s oracle network could address these vulnerabilities by providing accurate and tamper-proof data. These networks collect data from various sources and utilize consensus mechanisms to verify the information, ensuring the integrity of data and preventing erroneous trades and price manipulation.
Furthermore, Nazarov highlighted that integrating blockchain technology would enable real-time verification and automated responses to anomalies, thereby significantly enhancing the reliability and transparency of today’s financial markets.
In related news, Celo has integrated Chainlink’s CCIP interoperability protocol.
The emergence and purpose of oracle networks originated from the need to solve the issue of obtaining real-world price data for smart contracts.
Despite their name, smart contracts require real-world and digital price feeds to execute various financial instruments and business contracts. Without this crucial data, smart contracts would be nothing more than lines of code with limited utility in the business and financial sectors.
Oracle networks supply smart contracts with the necessary real-world data by utilizing a decentralized network of nodes to process and validate information. This approach ensures that data does not come from a single source and eliminates the risks associated with centralized information systems.
Regarding the NYSE glitch, on June 3, the prices of several large-cap stocks, including Berkshire Hathaway, McDonald’s, and Wells Fargo, experienced a drastic plunge of up to 99.9% due to a suspected software glitch in the New York Stock Exchange’s infrastructure.
Trading for the affected securities was temporarily halted due to the extreme price volatility caused by the glitch. However, trading resumed later for Berkshire Hathaway and the other impacted securities, and the issue has now been resolved.
Image: A tweet from Coin Bureau capturing the price glitch and highlighting the importance of oracle networks. Source: Coin Bureau
Magazine: Analysis of Crypto Hacks reveals Lazarus Group’s preferred exploit.