CapMoney, a prominent player in the digital currency space, recently announced its plans to leverage Chainlink Price Feeds on Ethereum for maintaining the stablecoin peg to the U.S. dollar. This strategy is intended to support cUSD, a stablecoin particularly designed for cross-border transactions and remittances, by providing reliable pricing data and enhancing security in the rapidly growing decentralized finance (DeFi) landscapes.
Backed by fully collateralized and restaked assets, cUSD employs Chainlink to ensure stronger safeguards that allow for stablecoin minting. Chainlink Price Feeds, renowned for their decentralization and resistance to manipulation, draw data from more than 20 centralized and decentralized exchange aggregators. This data is further integrated using volume-weighted averages and subsequently verified via consensus by security-audited nodes.
In terms of application, cUSD’s smart contracts call for a market alteration or a fresh price update when due. Oracle nodes collect and process this price data from external sources, eliminate any outliers, and report the results. This Chainlink data is then pooled, with the average value published on-chain to ensure that cUSD remains securely pegged and accessible, even in instances of extreme volatility or heavy load.
This strategic move by CapMoney marks a significant expansion in the DeFi utility of cUSD. By incorporating Chainlink infrastructure, cUSD paves the way for integration across various DeFi platforms, including automated market makers, lending platforms, and yield farming systems, all of which depend on accurate and trustworthy pricing data.
Chainlink’s programmable oracle facilitates the execution of smart contract transactions in response to real-world events. This functionality will be employed by CapMoney to streamline the settlement process and adjust collateral requirements, thereby further broadening the scope of cUSD’s applications.
The integration of Chainlink does not only enhance the operational stability of cUSD but also sets a precedent for other stablecoin issuers on Ethereum.
However, despite this strategic adoption, Chainlink’s native token, LINK, has struggled to maintain a positive trajectory. At present, LINK is valued at $12.15, reflecting a daily decrease of 0.74% and a significant drop from its peak value of around $30.86 in December.
On-chain indicators suggest a worrying decline in the fundamentals. Data from CryptoQuant reveals a drop in Active Addresses for Chainlink to approximately 3,200 this week, a staggering 72% decrease from the 11,400 reported in December.
Simultaneously, Santiment data demonstrates that large holders have begun to sell off more of their holdings. A significant number of wallets, holding between 10 million to 100 million LINK, have been offloading their tokens from February through mid-April. As a result, these wallets currently hold 46% of all circulating LINK tokens, creating a persistent downward pressure due to their exit activities.
LINK is dangerously close to its support level of $10, with expectations of further losses if the bearish momentum continues. Traders are now eagerly awaiting a positive signal that could reignite user interest and encourage larger whales to interact with the platform.
