The collaboration will lead to improved security and robustness of cross-chain bridges between Waves and Ethereum.
We are eager to announce the upcoming integration between Neutrino protocol and the Chainlink Network, which serves as a crucial element for seamless transfers of Neutrino USD (USDN) and other tokens between the two blockchains.
The Chainlink Proof of Reserve oracle network will provide regular, on-demand verifications of the reserves backing USDN across the multiple blockchain networks where USDN is issued, ensuring that full collateralization is maintained.
A mature oracle system like Chainlink is essential in maintaining the overall reliability of the algorithmic stablecoin as a secure, fully collateralized form of inter-chain liquidity.
Since USDN was ported to the Ethereum network as an ERC-20 token last year, the issuance of USDN in the Ethereum blockchain has been accompanied by locking an equivalent amount of USDN in the gateway account on the native Waves blockchain.
Therefore, it is necessary to introduce an external off-chain service (oracle) that monitors the locked balance on the Waves gateway account and verifies that there is exactly the same amount of USDN tokens issued on Ethereum.
Chainlink oracles are essential to creating such a Proof-of-Reserve (PoR) oracle network for USDN and other Neutrino assets. The main goal of Chainlink PoR is to prove that the reserves and minted token balances are equivalent across two or more disparate blockchains that have different APIs. As a secure and reliable data relayer between systems, Chainlink oracles are perfectly designed to facilitate inter-chain communication between Waves and Ethereum.
Chainlink nodes accomplish this by continually pinging the Ethereum-based USDN contract and Waves API off-chain for their current balances. Whenever a deviation in balances is spotted beyond a specific threshold, Chainlink oracles will trigger an on-chain up...