Chainlink has launched the DeFi Yield Index (CDY Index), designed to provide accurate information on real-time lending rates. According to the developers, this index is a crucial step towards standardizing and improving data access in the decentralized finance sector, benefiting both financial institutions and individual users.
Chainlink’s DeFi Yield Index (CDY Index) is a tool that seeks to solve one of the biggest challenges in the decentralized finance sector: the lack of standardized and accessible real-time data. According to the company, this index collects and processes information on lending rates from multiple decentralized protocols, offering a unified and up-to-date view of the market.
Lending on DeFi platforms has accumulated a total value locked, or TVL, of $47.000 billion, according to data from Chainlink. However, until now, market participants have relied on fragmented metrics or manual reporting to assess opportunities within the market. Chainlink’s new tool automates this process using indexing technology from Space and Time, a platform specializing in verifiable data on the blockchain.
«The CDY Index could become an industry standard for measuring performance in DeFi», said Davis Richardson, partner at Paradox Public Relations, highlighting its potential to reduce arbitrage discrepancies and attract traditional investors to the decentralized finance ecosystem.
A key collaboration with Space and Time
Chainlink’s new index will use the infrastructure of Space and Time, a company that brings its ability to process large volumes of data on the blockchain without sacrificing speed or security. According to the developers, this integration allows the index to update lending rates in real time, including protocols such as Aave, Compound, and MakerDAO, now called Sky.
Although this is Chainlink’s first index, the protocol is not new to the field. In fact, Chainlink is widely known for its network of oracles, which have already facilitated over $9 trillion in transactions in the DeFi ecosystem, a volume that has cemented it as a pillar for various applications, from stablecoins to prediction markets, among others. Now, with the launch of CDY Index, the protocol is expanding its reach towards generating financial metrics comparable to traditional indices, such as the S&P 500, but adapted to the innovation of the decentralized financial world.
Analysts link the launch of this new index to growing interest in financial products like the iShares Ethereum ETF, which could use real-time data from Chainlink to convert Ethereum staking rewards into dividends for TradFi investors. Richardson said investors are hungry for yield and Chainlink is working to bring real-time data and insights to unlock these opportunities.
Marking the evolution of global finance
The creation of the CDY Index represents a significant step towards standardizing data access within the DeFi sector. Furthermore, this launch reflects a strategic move by Chainlink to position itself as a critical infrastructure in the evolution of finance. By standardizing key DeFi data, it not only solves an immediate problem for users of this digital financial ecosystem, but also builds bridges with the traditional financial system.
If the index lives up to its promise, it could be a game-changer in how performance is measured and compared in the decentralized world, paving the way for a new era of hybrid products between the two systems. Meanwhile, the crypto community is eagerly awaiting the upcoming indexes announced by Chainlink, which promise to delve deeper into metrics such as credit risk and liquidity in DeFi.
