The impact was severe, especially for those leveraging the asset, which is backed by real-world assets (RWAs) and known for its high-yield potential.
However, that same leverage turned catastrophic when the mispriced data cascaded into forced liquidations.
The incident reignited scrutiny around on-chain oracles. Critics argue these systems are vulnerable to manipulation and errors, especially when operating in illiquid markets.
He also suggested the price feed might rely too heavily on APIs like CoinGecko, which he said is inappropriate for stablecoin pricing.
Goldberg further claimed that using volume-weighted average price (VWAP) in illiquid pools exposes protocols to exploitation. He added:
“The point of the oracle is to secure value and protect users. If the oracle is ‘dumb’ and just spits out pool prices, why even use Chainlink at all?”
However, not all voices aligned with the criticism.
Chainlink’s Community Liaison, Zack Rynes, pushed back against the allegations. He clarified that Chainlink merely reflects aggregated market activity and that it is up to individual protocols to interpret or filter the data.
“Chainlink puts the data users want onchain in the format they want, the protocols are responsible for ensuring that data meets their requirements and implements any additional subjective checks or limits they want.”
“Chainlink did their job.”
