CoinFLEX Moves Towards Decentralization with Chainlink Integration

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

In their newly released whitepaper, crypto futures exchange CoinFLEX made a bold stance showing that they have learned from the success of DeFi, and are aiming to build upon the ethos and innovation surrounding decentralized finance. The company has announced a partnership with blockchain oracle group Chainlink, reinforcing their commitment to focusing on decentralization as a core part of their operations. 
CoinFLEX's latest whitepaper detailed their plans to become the first centralized exchange to employ a "decentralized custody" model. In other words, custody of users' funds will no longer be required. Instead, funds will be secured by a decentralized smart contract that will manage and distribute them accordingly.

This model may give peace of mind to those who are worried about the potential counterparty risk associated with a centralized custody model that has resulted in multiple ‘rug pulls’ and scams over the past few years, including the more recent Africrypt case. Over $3.6 billion worth of user funds disappeared, along with both founders. 

CoinFLEX understands this counterparty risk as an inherent disadvantage of CEXs and believes that “trading on venues where your counterparty risk is to an algorithm, not a human” to be a key advantage of DeFi, as stated in their whitepaper. 

The company’s new model allows users to sign-up with Metamask or any ETH-address based crypto wallet and immediately deposit funds into a smart contract not managed by CoinFLEX or any single party. This model enables users, even those in the Americas, to trade CEX-style perps, spot, and futures using a DEX-style custody and clearing setup.

While the company aims to roll out decentralized custody by year-end, users are already able to connect to CoinFLEX directly via their Metamask account, which should be a familiar journey for most DeFi users. 

Once connected, DeFi users will gain access to the exchange’s latest product, dubbed AMM+. CoinFLEX launched AMM+ to bring Automated Market Making into the world of centralized orderbooks and futures. AMM+ allows users to earn passive income by deploying their capital into an AMM+ position, where they can collect fees from trades taking place on CoinFLEX’s futures orderbooks. 

AMM+ takes inspiration from Uniswap V3, allowing users to concentrate their liquidity into specific price ranges and increase capital efficiency. CoinFLEX’s centralized orderbooks, however, have an advantage over those found in Uniswap V3. In the latter, all trades take place on the blockchain and are thus limited by block size and gas fees. 

CoinFLEX’s centralized orderbooks allow trades to take place immediately. Since this involves participating in the futures markets, users benefit from far greater trading volumes than those found on decentralized exchange spot markets. With deeper trading markets and access to 10x leverage, AMM+ could be an attractive alternative for those looking to provide liquidity in DeFi. 

The integration with Chainlink Price Feeds will essentially provide CoinFLEX with a consistent, decentralized source of price information and offer its users “more robustness in extreme cases of data provider downtime, market volatility, flash crashes, or any other outlier situations.” 

“Chainlink Price Feeds were the ideal solution for our blockchain-based CeFi exchange because their price data has extensive market coverage across all trading environments and robust infrastructure to ensure consistent updates with high tamper-resistance and availability,” said Mark Lamb, CEO of CoinFLEX.

Read more about the Chainlink integration here, and the FLEX 2.0 Whitepaper here

About Chainlink

Chainlink is the industry standard oracle network for powering hybrid smart contracts. Chainlink Decentralized Oracle Networks provides developers with the largest collection of high-quality data sources and secure off-chain computations to expand the capabilities of smart contracts on any blockchain. Managed by a global, decentralized community, Chainlink currently secures billions of dollars in value for smart contracts across decentralized finance (DeFi), insurance, gaming, and other major industries.

Chainlink is trusted by hundreds of organizations, from global enterprises to projects, at the forefront of the blockchain economy, to deliver definitive truth via secure, reliable oracle networks. To learn more about Chainlink, visit chain.link and subscribe to the Chainlink newsletter. To understand the full vision of the Chainlink Network, read the Chainlink 2.0 whitepaper. Want to discuss an integration? Talk to an expert.
 

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About CoinFLEX

Founded in 2019, CoinFLEX is the Home of Crypto Yields and is committed to providing institutional and retail investors an easily accessible platform to earn and trade crypto.

CoinFLEX creates innovative solutions to bring investors and crypto markets together through intuitive yield products such as flexUSD, the world’s first interest-earning stablecoin, and AMM+, the most capital-efficient automated market maker in the world. CoinFLEX is backed by crypto heavyweights, including Roger Ver, Mike Komaransky, Polychain Capital, and Dragonfly Capital.

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The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.

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