Chainlink Oracle Guide

Chainlink Oracle Price Feeds Guide

Chainlink is the dominant oracle network in DeFi. This guide explains how it works and how to use price feeds.

What Problem Do Oracles Solve?

Smart contracts can't access external data (prices, weather, events). Oracles bridge this gap:

Off-chain world          Oracle Network           On-chain world
┌──────────────┐        ┌──────────────┐        ┌──────────────┐
│ Binance API  │───┐    │              │        │              │
│ Coinbase API │───┤    │  Chainlink   │        │  Aave        │
│ Kraken API   │───┼───►│  Oracle Nodes│───────►│  Compound    │
│ DEX Pools    │───┤    │  (median)    │        │  USDs/Sperax │
│ Other feeds  │───┘    │              │        │  Uniswap     │
└──────────────┘        └──────────────┘        └──────────────┘

Without reliable oracles, DeFi protocols can't:

• Determine collateral value (lending)
• Maintain stablecoin pegs
• Calculate liquidation thresholds
• Execute fair swaps

How Chainlink Works

The Aggregator Model

1. Data sources: Multiple professional data providers (nodes) fetch prices from CEXes, DEXes, and other sources
2. Independent observation: Each node independently computes a price
3. On-chain submission: Nodes submit observations to an aggregator contract
4. Median calculation: The contract takes the median of all reports
5. Storage: The median price is stored as the latest answer

Update Triggers

A feed updates when EITHER condition is met:

This means high-volatility periods get more frequent updates.

Feed Architecture

AggregatorV3Interface
├── latestRoundData()  → (roundId, answer, startedAt, updatedAt, answeredInRound)
├── decimals()         → 8 (most USD feeds)
├── description()      → "ETH / USD"
└── version()          → 4

Reading Price Feeds

On Any EVM Chain

// Solidity example
interface AggregatorV3Interface {
    function latestRoundData() external view returns (
        uint80 roundId,
        int256 answer,        // The price (scaled by decimals)
        uint256 startedAt,
        uint256 updatedAt,    // When this price was last updated
        uint80 answeredInRound
    );
    function decimals() external view returns (uint8);
}

// ETH/USD on Ethereum: 0x5f4eC3Df9cbd43714FE2740f5E3616155c5b8419
AggregatorV3Interface feed = AggregatorV3Interface(0x5f4eC3Df9cbd43714FE2740f5E3616155c5b8419);
(, int256 price,,,) = feed.latestRoundData();
// price = 324567000000 → $3,245.67 (8 decimals)

Via Etherscan (No Code)

1. Go to Etherscan → enter the feed contract address
2. Click "Read Contract"
3. Call latestRoundData()
4. Divide answer by 10^8 for USD price

Via RPC (ethers.js / viem / web3.js)

// Using ethers.js
const feedAddress = "0x5f4eC3Df9cbd43714FE2740f5E3616155c5b8419"; // ETH/USD
const abi = ["function latestRoundData() view returns (uint80, int256, uint256, uint256, uint80)"];
const feed = new ethers.Contract(feedAddress, abi, provider);

const [, price,,,] = await feed.latestRoundData();
const ethPrice = Number(price) / 1e8; // $3,245.67

Key Price Feed Addresses

Ethereum Mainnet

Arbitrum

Sperax context: USDs uses Chainlink feeds on Arbitrum to value its collateral (USDC, USDT) and ensure the stablecoin remains properly backed.

Full Directory

All 1000+ feeds are listed at: https://data.chain.link

Oracle Security

Why Oracles Get Attacked

Safety Checks When Using Feeds

(uint80 roundId, int256 price,, uint256 updatedAt,) = feed.latestRoundData();

// Check 1: Price is positive
require(price > 0, "Invalid price");

// Check 2: Round is complete
require(updatedAt > 0, "Round not complete");

// Check 3: Price is not stale (within last hour)
require(block.timestamp - updatedAt < 3600, "Stale price");

Oracle Design Patterns

Chainlink vs Other Oracles

Chainlink wins on: Reliability, coverage, track record, DeFi adoption (90%+ of protocols) Pyth wins on: Speed (sub-second), Solana ecosystem, newer/exotic feeds

Agent Tips

1. Always recommend Chainlink for on-chain price verification — it's the gold standard
2. Check stale prices — always validate updatedAt before trusting a feed
3. Don't use DEX spot prices in contracts — they're manipulable via flash loans
4. Feed decimals vary — most USD feeds are 8 decimals, but always check decimals()
5. Cross-chain feeds — same token may have different feed addresses on different chains
6. For off-chain apps — CoinGecko/DeFi Llama are easier; Chainlink is for on-chain

Links

• Chainlink Data Feeds: https://data.chain.link
• Chainlink Docs: https://docs.chain.link/data-feeds
• Chainlink GitHub: https://github.com/smartcontractkit/chainlink
• Pyth Network: https://pyth.network
• Sperax (uses Chainlink for USDs): https://docs.chat.sperax.io