We had the pleasure of taking part in the 2020 HackMoney Virtual Hackathon sponsored by ETHGlobal. Hackathon participants had the entire month of April to create the best working smart contract applications, with $5,000 in LINK bounties available to the top three projects integrating Chainlink.
In total, 18 projects integrated Chainlink oracles into their applications, representing one of the most used protocols in the entire hackathon. Winners were chosen based on their creativity, usability, and the technical complexity of their Chainlink integration. The top applications consisted of a no-loss rewards platform for gaming competitions, a self-sustaining tokenized index for stablecoins, and a DEX aggregator driven game.
First Place: Genie
Earning first place honors of $2,500 in LINK is Genie, a four-person dev team from Israel, Thailand, and the US. Genie is a no-loss reward platform for games and competitions, enabling community-driven eSports tournaments and challenges. Through integration with popular online games such as Path of Exile, any player can take part in a no-risk competitive match with cash prizes paid out in stablecoins.
Anyone can initiate a competition by choosing a game and creating a pool smart contract with predefined configurations. Players join by staking assets to the pool contract, which represents their ticket into the competition. While players compete, the pool is invested in the blockchain-based lending protocol Compound to generate interest, which ultimately becomes the winning player’s reward. Once the competition is over, all the participants can withdraw their original stake, while the winner receives back their stake plus all the interest generated in the pool.
Genie uses a decentralized network of Chainlink oracles to connect the pool smart contract with off-chain game data needed to verify winners. Chainlink’s external adapters were used to read the competition results from the off-chain gaming API and then write the response to the pool contract to execute a payout to the winner.
Genie’s backend developer Brahma articulated the importance of Chainlink being decentralized, stating “It’s important that it’s trustless, so the players don’t have to trust the Genie team to verify and reward winners.” Brahma also discussed how Chainlink makes it much easier to scale the number of games available on Genie, saying “Any time someone wants to integrate a new game, they can just build a new Chainlink external adapter.”
Second Place: DefiDollar
Coming in second place with a bounty of $1,500 in LINK is DefiDollar, a three-person team composed of Arpit Agarwal, Deep Joshi, and Manthan Satani. DefiDollar is a tokenized index of stablecoins built using DeFi primitives to maintain its dollar-peg.
According to the DefiDollar team, current stablecoins regularly suffer from volatility, have extensive governance concerns, and carry centralized custodial risks associated with address blacklisting or loss of funds. DefiDollar solves these problems by creating an index token (DeFiDollars) that’s collateralized by the top U.S. dollar-based stablecoins.
DefiDollar’s core smart contract allows users to deposit up to 8 existing stablecoins, which are then redirected to Aave’s decentralized money market protocol. These stablecoins collateralize interest-bearing Aave tokens that are then deposited into a liquidity pool (Balancer) to earn trading fees. Both the interest from Aave and the trading fees from Balancer accumulate in an earnings pool contract, which can be used to pay for protocol fees.
In order to keep the 1:1 ratio between stablecoins, arbitrageurs are incentivized to rebalance the liquidity pool. However, there are situations where all the stablecoins are trading below $1, putting the one dollar peg of DeFiDollars at risk. To hedge against these situations, Chainlink oracles periodically push Chainlink’s price reference data feeds to the DefiDollar core contract to inform it on the current price of the underlying stablecoins. When the contract notices that all stablecoin prices are below $1, it extracts coins from the earnings pool to recollateralize the liquidity pool and reestablish the $1 peg.
When asked about the value of Chainlink, Arprit explained that “We used Chainlink for our oracle solution because the Chainlink Network already provides secure and decentralized on-chain price reference data available for most stablecoins. Moreover, Chainlink price reference feeds are available on all Ethereum testnets, leading to minimal integration effort and seamless testing.”
Third Place: CandyShop
Winning the third place prize of $1,000 in LINK is CandyShop, a India-based team of blockchain developers including Vaibhav Chellani, Arth Patel, and Thrilok Kumar. CandyShop is a DEX aggregator that optimizes efficiency by arbitraging user swaps and splitting the arbitrage profits with the end users via a lottery.
CandyShop is designed to reduce slippage for large trades on Uniswap V1 by arbitraging that same trade using a Flash Swap on Uniswap V2. Users send their token swap request to CandyShop, which executes the swap on Uniswap V1. CandyShop then leverages a Flash Swap (a temporary loan paid back within the same transaction) on Uniswap V2 to arbitrage the same trade. The money saved from the Flash Swap is considered the profit. 20% of the profit is taken as “candie fees” that allow the user to participate in the lottery, and the remaining 80% is returned to the user.
Candie fees are deposited into the lottery pool, which is invested in Aave or Compound to earn interest for a period of one week. Users can also sponsor the lottery pool by depositing tokens to help accumulate more interest. Random winners are chosen using Chainlink’s Verifiable Random Function (VRF), a provably-fair way of generating true randomness that’s verifiable on-chain. Once the winner is chosen, the sponsor’s principal amount is returned.
Vaibhav Chellani of CandyShop shared the importance of Chainlink VRF to their lottery application, asserting that “Chainlink offers a quick pluggable system to obtain random numbers, which made the complicated task of getting a random number on a blockchain really simple.”
We are energized by the wide range of applications using real world data and augment their on-chain functions. Although there were only three winners, there were a multitude of creative, innovative, and technical projects built using Chainlink powered decentralized oracle networks. We look forward to continued participation in future hackathons, furthering our mission to make smart contracts the dominant form of digital agreement throughout the world.
Start Building with Chainlink Today
If you want to start building with Chainlink today, visit the developer documentation, join the technical discussion on Discord, and/or reach out to us about securely launching your data-enabled application, Chainlink Price Reference Data Contract, or Chainlink VRF product on mainnet.