Chainlink, the crypto project of decentralized Oracle networks, stepped in after the incident at the NYSE, when the Berkshire Hathaway stock appeared to drop by 99%. Chainlink co-founder, Sergey Nazarov, explained his solution that would improve the stability of the stock exchange.
Chainlink: the crypto project of Oracles as a solution to the NYSE inconvenience
Yesterday, June 3, trading on the New York Stock Exchange (NYSE) was abruptly halted, after the class A shares of Berkshire Hathaway appeared to drop in value by 99.97%.
In fact, from the price of 627,214.90 dollars, the shares dropped to 185.10 dollars. This interruption, coded as M, was caused by volatility and the reason for the sudden drop is still unclear.
Not only that, as reported by Bloomberg, it seems that in a related incident, a malfunction at the NYSE operator caused the interruption of volatility trading in a dozen other companies, such as McDonald’s and Wells Fargo.
The Depository Trust & Clearing Corporation (DTTC) is currently experimenting with the use of blockchain technology with Chainlink to speed up mutual fund settlements, but it seems that the stock market needs blockchain more than it knows.
On X, the Coin Bureau highlighted how the decentralized oracle network of Chainlink would be the solution to the problem.
Berkshire Hathaway’s Stock price is down 99% in an apparent market glitch.
The NYSE really needs to use better Oracle providers. pic.twitter.com/nHrI0Qe884
— Coin Bureau (@coinbureau) June 3, 2024
“The price of Berkshire Hathaway shares has dropped by 99% due to an apparent market issue. The NYSE really needs to use better Oracle providers.”
Chainlink: the co-founder of the crypto company explains the importance of Oracles for traditional finance
Regarding this inconvenience of the NYSE, even the co-founder of Chainlink, Sergey Nazarov, explained how the network of decentralized oracles can remedy the points of failure of centralized systems.
Here are the words of Nazarov:
“The decentralized oracle networks, which were invented by Chainlink, can mitigate these risks by providing accurate and tamper-proof data. These networks aggregate data from various sources and use consensus mechanisms to validate the information, ensuring data integrity and preventing erroneous operations and price manipulations. The incorporation of blockchain technology would allow for real-time verification and automatic responses to anomalies, significantly improving the reliability and transparency of current financial markets.”
In practice, Oracolo networks were invented to overcome the problem of real price data for smart contracts.
In fact, Oracle networks provide smart contracts with the real-world data they need to function as financial instruments and commercial contracts. Thanks to the decentralized network of nodes to process and validate the data, oracles ensure that the data does not come from a single source, preventing the single points of failure inherent in centralized information systems.
Cryptocurrency trading at the NYSE
Recently, Lynn Martin, President of the NYSE, during the Consensus 2024, stated that she wants to consider offering cryptocurrency trading, but only if the regulatory framework is clearer.
For Martin, crypto trading is also to be considered as an opportunity for expansion for the stock market giant.
Also Tom Farley, CEO of Bullish and also predecessor of Martin at the NYSE, has released his own forecast on the matter. According to Farley, the US regulatory environment in the crypto sector will improve over the next two years.