New York, New York, September 12, 2024, Chainwire
Leading trading platform Jupiter upgrades to Chaos Labs Edge for increased protocol stability
Chaos Labs, the industry leader in on-chain risk management, today announced the launch of Edge, a decentralized oracle protocol powering Jupiter, the leading perpetual exchange on Solana. Over the past two months, Edge has already seen $30B in trading volume on Jupiter, establishing Chaos’ new price feed solution as a leader in the low-latency oracle category.
According to the team, the fragmentation of liquidity and price discovery on networks has made asset pricing increasingly complex. In the case of leveraged markets, any inaccuracy in pricing becomes a vector for potential exploitation. As protocols move towards trading instruments with higher leverage and including more illiquid assets, integrating a price oracle solution that is resilient to outliers and anomalies at such fine granularity is essential.
Furthermore, Chaos Labs believes that decentralized applications have traditionally relied on “messenger oracles,” a term used to describe oracle solutions that seek to outsource the responsibility of ensuring data quality to other trusted entities. The problem with not having a clear opinion on pricing content methodology is twofold: it absolves the oracle of liability in the event of typos, and creates opacity around how data is obtained and validated.
In response to customer protocol demand for an enhanced Oracle solution, Chaos Labs built the Oracle Edge Network (NYSE:) for any on-chain application with a market.
The protocol’s design reflects the company’s core thesis that risk data and price data are inextricably linked. Edge offers a low-latency, end-to-end oracle solution that combines accurate price data with actionable market information. Its advanced architecture ensures the security and efficiency of DeFi applications while providing insights into market dynamics and security risks.
Edge monitors the market for specific risk signals, performs off-chain data analysis and calculation, and generates an actionable data point.
Chaos Labs has a deep understanding of market dynamics, which has been instrumental in managing risk for major DeFi protocols. By applying its expertise in complex risk analysis to price feed products, Chaos has built a network of oracles that deliver not only basic informed prices, but also various risk-related factors such as volatility, liquidity, and broader market behaviors.
By taking liquidity and volatility into account, Edge’s algorithms adjust prices to try to avoid distortions from sudden price spikes or drops, with the goal of ensuring more accurate and reliable price data that reflects real-time market conditions. This allows Edge’s price data to provide more accurate and timely insights, with the goal of consistently outperforming traditional oracles.
Price oracles typically report similar values under normal market conditions, but can show significant differences during extreme events such as sudden price spikes. Edge incorporates multiple data points and risk metrics to provide price feeds designed to remain reliable during periods of high volatility.
Edge is made up of three components:
● Price: Provides highly accurate pricing data with a built-in risk engine powered by Chaos' advanced anomaly and outlier detection algorithm
● Risk: Automates the delivery of real-time parameter adjustments on-chain based on current market conditions.
● Evidence: Enables secure on-chain delivery of custom data points, including reservation attestations delivered via zero-knowledge proofs (ZKP).
“You can't take on asset or market risk without a deep understanding of the oracle pricing mechanism. Conversely, building a robust and secure oracle requires understanding the market structure of assets, the costs of manipulation, and how applications will consume the data,” said Omer Goldberg, CEO and founder of Chaos Labs.
“Using Edge pricing has significantly improved the user experience by reducing latency and improving reliability by 70%. Edge allows us to reliably and quickly publish pricing on Solana for Jupiter Perps,” said Siong, CTO of Jupiter Exchange.
Jupiter’s well-documented challenges with its legacy oracle architecture led to higher transaction costs and poor execution, providing the impetus for the upgrade to Chaos’ Edge. Since migrating to Edge as its primary oracle, Jupiter has seen a 70% reduction in price staleness events and an 80% decrease in update fees, due to the efficiency of Edge’s price reporting payload, which has increased the number of prices Jupiter can validate in a single transaction by 5x.
“With Jupiter Perps, our goal is to match CEX in performance, fees, and reliability. Edge has been a major part of that and we look forward to advancing that goal with Chaos Labs,” said Meow, CEO of Jupiter Exchange.
Edge Price Feeds power multiple core functions of the Jupiter platform, facilitating the opening and closing of trades, calculating margin burn, and triggering stop-loss/take-profit orders and liquidations for all Jupiter markets. On August 5, the largest one-day market drop in nearly two years, Edge triggered over $500 million in liquidations alone.
“The next $10 trillion in on-chain volume won’t be settled through simple API wrappers. Edge is designed to meet the complex demands of modern decentralized applications,” Goldberg said.
Edge was designed for use cases beyond decentralized finance. The protocol was designed with arbitrary off-chain data (such as real-world event results, reserves, and weather information) in mind to bring on-chain.
This announcement follows a recent successful $55 million Series A funding round led by Haun Ventures with participation from funds including Spartan Capital, Galaxy Ventures, F-Prime Capital, and Slow Ventures. Chaos Labs will share further Edge-related announcements in the coming weeks.
About Chaos Labs
Chaos Labs leads the blockchain risk management industry with innovative solutions for the evolving on-chain finance landscape. Chaos Labs enables protocols to verify stability under all market conditions, merging off-chain observability with on-chain risk parameter adjustments. Backed by leading venture capital firms, Chaos Labs continues to set new standards for security and responsiveness in on-chain finance. Founded in 2021, Chaos Labs is headquartered in New York City.
About Jupiter
Jupiter is Solana’s premier trading destination, with a powerful trading suite in Jupiter Spot and Perps. Jupiter Perps is currently the #1 oracle-based Perps exchange, or #3 among all PerpDEXs.
ContactVice President of Commercial OperationsNetta GoldbergChaos Labs[email protected]
This article was originally published on Chainwire
