Yesterday, the integration of Chainlink on the decentralized crypto exchange PancakeSwap was announced.
.@PancakeSwap has integrated #Chainlink Data Streams and Automation on @arbitrum to power its prediction markets.
By using the industry-standard Data Streams, PancakeSwap is accessing on-demand, low-latency price data used at the start and end of each prediction round.… pic.twitter.com/pSGeCcXQcy
— Chainlink (@chainlink) January 24, 2024
Thanks to this integration, PancakeSwap will be able to power its prediction markets on Arbitrum with data feeds and automation from Chainlink
PancakeSwap: the crypto DEX integrates Chainlink for the Arbitrum network
PancakeSwap is one of the leading decentralized crypto exchanges (DEX) in the world.
There was a time when it was able to reach daily trading volumes even higher than those of Uniswap, becoming for a brief period the largest DEX in the world.
Now, however, it has slipped further back in this ranking, still dominated by Uniswap. In particular, recently it has also been surpassed by Orca, the main DEX on Solana.
PancakeSwap was born as an exchange on BSC (Binance Smart Chain), and to this day it is the main DEX on this network. At the beginning of 2021, there was a real boom in BSC, and this greatly helped PancakeSwap to grow and spread.
However, during the bear market of 2022, and especially during 2023 with the major issues with authorities faced by Binance, the usage of PancakeSwap has significantly decreased.
All of this is well represented by the downward trajectory of its CAKE token.
The token landed on the crypto markets in September 2020, shortly after the launch of the DEX, at a price of about $1.3.
During the incredible boom at the beginning of 2021, its price reached an all-time high of over $44 on April 30th, with a gain of 3,000% since its debut just a few months earlier.
From that point on, a long descent began, potentially still ongoing, so much so that by the end of 2021 it was already at $12, only to slide to $2.6 in 2022. In 2023 it fell even further, reaching $1 in October, which is a lower point than the initial price in 2020.
In December 2023, it had risen to over $3.5, but during 2024 it dropped to $2.5. The current price is lower than the minimum of 2022, while it is more than double the minimum of late 2023.
The Chainlink Oracles
Chainlink is the leading provider of oracles in the crypto world.
This is a project that was born many years ago, in 2017, when neither Arbitrum nor PancakeSwap existed, nor even BSC.
Even in this case, the parable of its success is well represented by the market value of its LINK token.
It should be noted that there are even ETPs (similar to ETFs) on LINK, which was so successful in recent years.
LINK debuted on the crypto markets in 2017, at a ridiculously low price of less than $0.2.
During the 2017/2018 bubble, it even surpassed $1, but it was in 2019 that it took off.
First, it exceeded $3.6, and then in 2020 it also reached $4.5. At that point, even before the 2021 bubble began to inflate, it had already gained 2,000% compared to the initial price three years earlier.
In 2021 it reached the remarkable figure of $53, then dropped to $5.4 by the end of 2022. In 2023 it hit the lowest point of its bear market, at $5.2, which is still a much higher figure than the peak of the previous cycle’s bull run ($1).
In late 2023, it experienced a strong rebound, reaching over $16. Now it has dropped to $14, but despite this, its long-term performance remains excellent, for now.
PancakeSwap and Chainlink
PancakeSwap is now not only on BSC, but also on Ethereum and on some of its layer-2 solutions including Base, Polygon, and specifically Arbitrum.
However, Arbitrum is one of the most widely used layer-2 solutions for Ethereum by DEXs, so much so that for example, the version of Uniswap on Arbitrum is the second in terms of trading volumes, behind the one on Ethereum.
The fact that Arbitrum allows for faster and, above all, cheaper transactions often makes it preferable as a network to Ethereum, although Ethereum still attracts the highest volumes.
The Arbitrum version of PancakeSwap will support data flows and Chainlink automation.
As Chainlink itself reports, thanks to this integration the DEX will have access to on-demand price data with low latency used at the beginning and end of each prediction round.
In fact, for its prediction markets, PancakeSwap needs a pull-based oracle that provides extremely fast market data, and that is supported by a decentralized and transparent infrastructure.
For this reason, it has chosen Chainlink Data Streams because it has sub-second price resolution, frontrunning protection, decentralized onchain execution through Chainlink Automation, and a proven infrastructure over time.
