Chainlink CEO Highlights Solution to NYSE Glitch: Decentralized Oracle Networks
Summary:
A technical error on the New York Stock Exchange (NYSE) resulted in an abrupt 99.9% drop in various securities' prices. This incident emphasized the vulnerabilities of traditional, centralized financial systems. Sergey Nazarov, Chainlink CEO, suggested that decentralized oracle networks, like Chainlink, could prevent potential failures and enhance the transparency of financial markets by providing accurate and tamper-proof data. Nazarov continued saying that these oracle networks feed smart contracts with the necessary live data to function flawlessly. The trading of the impacted shares was briefly halted due to the price volatility but has since recommenced and the issue has been rectified.
A recent technical malfunction that led to a massive price drop of various securities on the New York Stock Exchange (NYSE) by almost 99.9% prompted Sergey Nazarov, CEO and co-founder of Chainlink (LINK), to highlight the vulnerabilities of these traditional financial systems due to their highly centralized structure. Speaking to Cointelegraph, Nazarov elucidated how the Chainlink oracle network could address the faults of these centralized systems. He stated that the decentralized oracle networks pioneered by Chainlink are designed to deliver precise, attack-resistant data. By gathering data from multiple sources and utilizing consensus protocols to authenticate this information, they can maintain data integrity and prevent faulty trades and price manipulations.
Nazarov further expressed that the incorporation of blockchain technology would allow real-time verification, thus facilitating automatic responses to inconsistencies to considerably improve the dependability and transparency of current financial markets.
This commentary was linked to Celo's recent integration of Chainlink's CCIP interoperability protocol. Oracle networks, such as Chainlink, were developed as a solution to the requirement of live price data for smart contracts within the financial and business world.
Despite their name, smart contracts are not inherently intelligent and rely on real-world and digital price feeds to execute tasks from settling futures contracts to flash loans. In the absence of this crucial data, the contracts only exist as code strings and carry little value.
Oracle networks equip these smart contracts with necessary real-world data for proper functionality. They process and validate this data through a decentralized network of nodes, preventing sole control and potential failure associated with centrally governed information systems.
A subsequent update regarding the NYSE malfunction stated that on June 3, the value of several renowned stocks such as Berkshire Hathaway, McDonald’s, and Wells Fargo nosedived by nearly 99.9%. This was allegedly due to a software malfunction within NYSE's framework. A tweet from Coin Bureau highlighted the importance of oracle networks while detailing the price glitch.
Trading of the affected securities was temporarily suspended due to the erratic price fluctuations caused by the error but was later reinstated for Berkshire Hathaway and other impacted shares. The matter was eventually rectified. A magazine revealed that the preferred exploit method of the Lazarus Group was utilized during this crypto hack examination.
Published At
6/4/2024 12:33:23 AM
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