Ruler Protocol Integrates Chainlink Price Feeds to Securely Calculate Mint Ratios

Ruler Protocol
4 min readMay 13, 2021

We are excited to announce that Ruler Protocol is now using Chainlink Price Feeds live on mainnet to secure user funds within our no-liquidation lending platform. As the most widely adopted oracle solution in DeFi, Chainlink Price Feeds are time-tested oracle infrastructure for accessing the most up-to-date, accurate, and tamper-proof prices on-chain for various digital assets. Ruler Protocol uses Chainlink Price Feeds to calculate a pool’s minimum collateralization ratio, which keeps Ruler Protocol secure by limiting a pool’s ability to mint new loans when market conditions deem it necessary.

We elected to use Chainlink Price Feeds because they are pre-built and time-tested in production, already securing billions of dollars in DeFi value and requiring little integration overhead. Chainlink Price Feeds are secured by a decentralized network of security-reviewed oracle nodes run by leading DevOps with a historical track record of reliability, even during extreme network congestion. Data is sourced from premium data aggregators, resulting in prices that have been aggregated from hundreds of exchanges, weighted by volume, and cleaned of outliers and wash trading. Ultimately, this makes for precise price data that are resistant to unexpected events like API downtime, flash crash outliers, and data manipulation attacks using flash loans.

Mint Ratios and the Use of Chainlink Oracles

Ruler Protocol fixes the minting ratio for a given Ruler Pair. The mint ratio represents how many dollars you can borrow per one collateral token. This is essentially the same as a Loan-to-value (LTV) ratio that other popular lenders refer to. For example, for every one wBTC you deposit with a mint ratio of 29,000, you would only receive a max of 29,000 stablecoins as a loan. Thus, until the pair’s expiry date, the same number of tokens will be minted per unit of collateral (the minting ratio). However, if the price of the collateral as determined by a Chainlink Price Feeds drops sufficiently such that:

Collateral Price / Mint Ratio < Minimum Collateralization Ratio

then user deposits will be disallowed. Minting can only resume when the price rises to bring the collateralization ratio back above the minimum.

This mechanism prevents minting when the price of the collateral is close to or below the repayment value in Ruler Repayment Tokens (rcTokens). If minting were allowed with the price below the expected repayment value, then the risk of free mints would become possible whenever there are prepayments.

“By using Chainlink as our default Price Feed oracle provider, Ruler Protocol is providing our users with a more accurate, seamless, and overall safer experience. We’re excited to sponsor various price feeds to help further the adoption of Chainlink in DeFi, as well as securing user funds within Ruler Protocol!” — Alan, Core Dev at Ruler Protocol.

We look forward to the benefits this integration will bring and the future innovations that Chainlink continues to provide to the market. The Ruler Protocol team is thrilled to be able to share this news with the community and proud to be part of the Chainlink ecosystem!

About Chainlink

Chainlink is the most widely used and secure way to power universally connected smart contracts. With Chainlink, developers can connect any blockchain with high-quality data sources from other blockchains as well as real-world data. Managed by a global, decentralized community of hundreds of thousands of people, Chainlink is introducing a fairer model for contracts. Its network currently secures billions of dollars in value for smart contracts across the decentralized finance (DeFi), insurance and gaming ecosystems, among others.

Chainlink is trusted by hundreds of organizations to deliver definitive truth via secure, reliable data feeds. To learn more, visit chainlink, subscribe to the Chainlink newsletter, and follow @chainlink on Twitter.

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About Ruler

Ruler Protocol is a lending and borrowing platform providing its users with market-driven, fixed-rate, and non-liquidatable loans. With Ruler Protocol, there are no bonding curves to determine interest rates. Instead, rates are decided by market supply and demand. As long as you make your loan repayment by the due date given, you will never have to worry about health factors or having your position liquidated.

Ruler is trusted by thousands of borrowers to secure fixed interest rates and non-liquidatable loans. To learn more, visit the Ruler docs site, and follow @RulerProtocol on Twitter.

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