New York, New York, September 12th, 2024, Chainwire
Jupiter, the leading Solana trading platform, upgrades to Edge by Chaos Labs for enhanced protocol stability
Chaos Labs, the industry leader in onchain risk management, today announced the launch of Edge, a decentralized oracle protocol, powering Jupiter, the leading perpetuals exchange on Solana. Over the past two months, Edge has already secured $30 billion in trading volume on Jupiter, establishing Chaos’ new price feed solution as a leader in the low-latency oracle category.
According to the team, fragmentation of liquidity and price discovery across networks has made asset pricing increasingly complex. For leveraged markets, any pricing inaccuracy becomes a potential exploit vector. As protocols move towards trading higher leverage instruments and listing more illiquid assets, integrating a price oracle solution resilient to outliers and anomalies at such fine granularity is essential.
Additionally, Chaos labs assesses that decentralized applications have traditionally relied on “messenger oracles,” a term used to describe oracle solutions that seek to outsource the responsibility of ensuring data quality to other trusted entities. The trouble with being unopinionated about the price content methodology is twofold: it absolves the oracle from accountability in the event of misprints and creates opacity around how the data is sourced and validated.
In response to demand from customer protocols for an upgraded oracle solution, Chaos Labs built the Edge Oracle (NYSE:ORCL) Network for any onchain application with a market.
The protocol’s design reflects the company’s central thesis that risk data and price data are inextricably linked. Edge offers a comprehensive, low-latency oracle solution, combining accurate price data with actionable market intelligence. Its advanced architecture ensures the security and efficiency of DeFi applications while providing insights into market dynamics and security risks.
Edge monitors the market for specific risk signals, performs the offchain data parsing and computation, and outputs one actionable data point.
Chaos Labs possesses a deep understanding of market dynamics, which has been instrumental in managing risk for top DeFi protocols. By applying their expertise to complex risk analysis to price feed products, Chaos has built an oracle network that delivers not just basic reported prices, but also various risk-related factors like volatility, liquidity, and broader market behaviors.
By accounting for liquidity and volatility, Edge algorithms adjust prices to try and prevent distortions from sudden price spikes or dips, aiming to ensure more accurate and reliable price feeds that reflect real-time market conditions. This enables Edge price feeds to offer more precise and timely insights, aiming to consistently outperform traditional oracles.
Price oracles typically report similar values under normal market conditions but may show significant differences during extreme events, such as sudden price spikes. Edge incorporates multiple data points and risk metrics to provide price feeds designed to remain reliable during periods of high volatility.
Edge is comprised of three components:
● Price: Delivers high-precision price data with an integrated risk engine powered by Chaos' advanced outlier and anomaly detection algorithm
● Risk: Automates delivery of real-time parameter adjustments onchain based on current market conditions.
● Proofs: Enables the secure on-chain delivery of custom data points, including reserve attestations delivered via zero-knowledge proofs (ZKPs).
“You can't underwrite asset or market risk without profoundly understanding Oracle's pricing mechanism. Conversely, creating a robust, secure Oracle requires understanding the asset's market structure, manipulation costs, and how applications will consume the data,” said Omer Goldberg, CEO and Founder of Chaos Labs.
“Using Edge’s prices has significantly improved UX by reducing latency and improving reliability by 70%. Edge allows us to publish prices on Solana reliably and quickly, for Jupiter Perps," said Siong, CTO of Jupiter Exchange.Jupiter’s well-documented challenges with its legacy oracle architecture led to higher trading costs and poorer execution, providing the impetus for the upgrade to Chaos’ Edge. Since migrating to Edge as its primary oracle, Jupiter has observed a 70% reduction in price staleness events and an 80% decrease in update fees, owing to the payload efficiency of Edge’s price reports, which have increased the number of prices that Jupiter can validate in a single transaction by 5x.
"With Jupiter Perps, our goal is to match CEX in performance, fees and reliability. Edge has been a massive part of that, and we look forward to pushing towards that goal with Chaos Labs” said Meow, CEO of Jupiter Exchange.Edge Price Feeds power multiple core functions of the Jupiter platform, facilitating the opening and closing of trades, calculating margin consumption, and triggering stop-loss/take-profit orders and liquidations for all of Jupiter’s markets. On August 5th, the largest one-day market crash in nearly two years, Edge powered more than $500m in liquidations alone.
“The next $10T in on-chain volume won't be settled via simple API wrappers. Edge is designed to meet the complex demands of modern decentralized applications,” said Goldberg.Edge was built for use cases beyond just decentralized finance. The protocol was architected with arbitrary offchain data — such as real world event outcomes, reserves, and climate information— in mind, to be brought onchain.
This announcement follows a recent successful $55 million Series A led by Haun Ventures with participation from funds including Spartan Capital, Galaxy Ventures, F-Prime Capital, and Slow Ventures. Chaos Labs will be sharing more announcements related to Edge in the coming weeks.
About Chaos Labs
Chaos Labs leads the blockchain risk management industry with innovative solutions for the evolving onchain financial landscape. Chaos Labs enables protocols to verify stability across all market conditions, merging offchain observability with onchain risk parameter adjustments. Backed by leading venture capital firms, Chaos Labs continues to set new standards for security and responsiveness in onchain finance. Founded in 2021, Chaos Labs is headquartered in New York City.
About Jupiter
Jupiter is the premier trading destination on Solana, with a powerful trading suite across Jupiter Spot & Perps. Jupiter Perps is currently the #1 Oracle-based Perps Exchange, or the #3 across all PerpDEXes.
ContactVP Business OperationsNetta GoldbergChaos Labsnetta@chaoslabs.xyz