Gemini to Sponsor a Chainlink Proof of Reserve Feed For On-Chain Audits of EFIL Collateralization
The Chainlink Proof of Reserve (PoR) implementation will allow DeFi platforms to audit EFIL collateralization directly on-chain before approving EFIL to be used in various functions, such as collateral for a loan.
SAN FRANCISCO, Sept. 23, 2021 /PRNewswire/ -- We are excited to announce that as part of Gemini's launch of Wrapped Filecoin (EFIL), Gemini will sponsor a Proof of Reserve data feed powered by Chainlink's industry-leading oracle network. The Chainlink Proof of Reserve (PoR) implementation will allow DeFi platforms to audit EFIL collateralization directly on-chain before approving EFIL to be used in various functions, such as collateral for a loan. By doing so, EFIL becomes an even more trusted asset within the Ethereum DeFi ecosystem, as users have additional proof of its 1-to-1 collateralization with FIL held by Gemini Custody™.
Filecoin is the native token of the Filecoin Network, a decentralized data-sharing platform. FIL is used to purchase storage space on, and retrieve files (i.e., data) from, the Filecoin Network. Miners receive FIL for storing files and verify their services via cryptographic proofs. This decentralized model offers a compelling alternative to existing centralized cloud storage offerings.
Gemini launched the wrapped EFIL token to bridge Filecoin's native asset to the largest smart contract ecosystem, enabling users to make payments to Filecoin miners or utilize it within Ethereum DeFi platforms. Users in the United States, UK, and Singapore can simply convert their FIL 1:1 into EFIL through the Gemini Mobile App and Website using the convert button — and EFIL can be converted back into FIL using the same process. Once EFIL is in your Gemini wallet, withdraw it to any Ethereum address you specify to lend, borrow, pay, or stake your EFIL.
The wrapping functionality is facilitated by an open-source Ethereum smart contract that wraps FIL and converts it into an ERC-20 token — EFIL. The EFIL smart contract mints and burns EFIL, and ensures that the value of available EFIL is equal to the amount of FIL held in Gemini Custody, our institutional-grade storage system.
While Gemini Custody has robust security, compliance, and operational protocols, they are sponsoring a Chainlink Proof of Reserve (PoR) data feed to further enhance those assurances, specifically for DeFi platforms incorporating EFIL. The PoR data feed uses a Chainlink-powered decentralized oracle network to consistently check the balances of Gemini's custody wallet for FIL. Whenever a deviation is spotted beyond a predefined threshold (e.g. 1%), Chainlink oracles will push an on-chain update to a specific reference contract that stores the EFIL reserve balance.
DeFi platforms can then call the PoR reference contract for the current EFIL reserves and compare it to the circulating supply of EFIL on Ethereum to immediately verify the collateralization of EFIL. If EFIL is found to be under-collateralized, DeFi platforms can incorporate customized logic for handling such situations like temporarily suspending the issuance of loans collateralized by EFIL. This brings additional protection to DeFi users of EFIL, preventing situations like black swan events and fractional reserve practices.
Chainlink, which powers the PoR data feed, is the most time-tested and historically reliable oracle network in the blockchain industry, already securing tens of billions of dollars for top DeFi projects like Aave, Compound, and dYdX. The data feed is operated by a decentralized network of nodes operated by the world's top DevOps and infrastructure providers such as telcos like Swisscom and Deutsche Telekom subsidiary T-Systems.
By having a decentralized infrastructure run by provably reliable node operators, EFIL users can feel very confident in having an accurate, highly available, tamper-resistant, and transparent source of information regarding the current EFIL reserves. The end result is EFIL being a more reliable form of collateral and payment throughout DeFi and other smart contract verticals on Ethereum needing storage solutions.
"This collaboration with Chainlink will further drive trust and transparency in our Wrapped Filecoin (EFIL) product," said Tyler Winklevoss, CEO of Gemini. "By providing a Proof of Reserve data feed for EFIL, Chainlink's decentralized oracle network will instill confidence in EFIL with automatic on-chain audits, helping to secure user funds and ensure the reliability of the system. As we continue to build bridges to DeFi, Chainlink offers a proven oracle infrastructure for helping us realize our vision of building a secure and transparent ecosystem."
"We are pleased to support Gemini's mission to create a more secure and transparent blockchain ecosystem by launching a Chainlink Proof of Reserve data feed to verify EFIL's collateralization against FIL assets held by Gemini Custody wallets," stated Sergey Nazarov, Co-founder of Chainlink. "In automating on-chain audits of wrapped assets like EFIL, Chainlink Proof of Reserve helps ensure end-to-end transparency around off-chain assets and empowers developers to preprogram smart contracts to instantly protect user funds when collateral deviates from predefined thresholds."
To learn more about EFIL read Gemini's technical blog post.
About Chainlink
Chainlink is the industry standard oracle network for powering hybrid smart contracts. Chainlink Decentralized Oracle Networks provide 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 Gemini
Gemini is a platform that allows customers to buy, sell, store, and earn cryptocurrencies like bitcoin, ether, and DeFi tokens. Gemini's simple, reliable, and secure products are built to empower the individual. Gemini was founded in 2014 by twin brothers Cameron and Tyler Winklevoss.
To learn more about Gemini, visit our website Gemini.com.
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