Quick Facts

Approximate Market Cap$8,031,713,708.55
Year Established2017
FounderSteve Ellis, Sergey Nazarov, Ari Juels
Symbol/AbbreviationLINK
UtilityObject

Smart contracts enable the creation of reliable and autonomous apps. But these programs can only be as successful and accurate as the data they get. The blockchains on which smart contracts run can’t support native communication with external systems. 

An oracle is a device that links data from these self-driving apps to the outside world. ChainLink is a decentralized oracle network that aims to remove the single point of failure that previously existed in oracle systems.

What is ChainLink – Definition

ChainLink (LINK) is a decentralized data routing protocol built on Ethereum.  The project aims to incentivize the creation of a worldwide, decentralized oracle network made up of thousands of computers. 

The LINK token is the native token of ChainLink. It is mostly used to pay ChainLink Node operators for oracle services.

ChainLink nodes may also stake LINK as collateral to ensure the data delivery service. This collateral function is an optional feature of LINK. It allows operators the ability to earn additional income.

The ChainLink network uses a Proof of Stake (PoS) protocol. Validator nodes stake LINK in order to be compensated by the network for obtaining data contracts. The incentive rewards structure and the danger of losing the LINK they have staked deter network nodes from engaging in harmful or unethical activity.

Pros and Cons

Pros

  • Scalable
  • Easy to use
  • Smart contracts

Cons

  • Volatile
  • Decentralization issues
  • Low development speed

The History

The project was created by SmartContract.com. It was a company founded in 2014 by Sergey Nazarov and Steve Ellis. Their idea was to create a bridge between external data and public blockchains. 

In 2017, SmartContract.com introduced ChainLink. It was a decentralized network aimed to link real-world data and public blockchains. ChainLink connected smart contracts to off-chain data for markets, events, and payments.   

ChainLink received its first round of financing in September 2017. In an ICO, the firm raised $32 million by selling 350,000,000 LINK (ICO). There were a total of 1,000,000,000 LINKs distributed.

How ChainLink Works

Blockchains don’t have the capacity to link to external apps in a secure way. Through a wide network of nodes, ChainLink facilitates the transfer of data from off-chain sources to on-chain applications. This is what is commonly referred to as an oracle service. ChainLink seeks to end the central point of failure present in prior oracle solutions.  

ChainLink’s core functional objective is to bridge two environments: on-chain and off-chain.  

The On-Chain network consists of three main blockchain components:

  • Oracle selection
  • Data reporting
  • Result aggregation

The Off-Chain consists of a network of oracle nodes connected to the Ethereum network:

  • ChainLink Core
  • External Adapters
  • Subtask Schemas

ChainLink takes the smart contract’s capabilities to the next level. It allows access to real-world data, events, and payments. It doesn’t risk the security and efficiency of blockchain technology.

Advantages & Disadvantages

Advantages

Scalability

One of ChainLink’s most appealing characteristics is how scalable it is for its users. This implies it can deal with a lot of data in its network.

User Friendly

ChainLink has created a user interface and design that is simple to use and adapts to your needs.

DeFi Apps

Smart contracts have the ability to imitate a substantial percentage of the financial agreements now accessible on the market. 

Disadvantages

Volatility

Token volatility has the potential to affect ChainLink economics. It can also affect the security of the network. 

Decentralization 

If too many nodes are located in the same jurisdiction, they could be targets of censorship, weakened by natural disasters, or central points of attack. 

ChainLink in the Global Crypto Market

ChainLink is already one of the most used protocols. Many believe that the adoption of decentralized applications may have only just begun. Oracle services including ChainLink may become more significant as the use of decentralized apps grows.

ChainLink (LINK) is presently ranked #9 in terms of market cap among all crypto projects. It has a market capitalization of around $12,975,926,980 USD. As with every other cryptocurrency, this market cap is subject to dramatic fluctuations.

A total of 1 billion LINK tokens are available in ChainLink. There are 410,009,556 LINK in circulation.

LINK, unlike many other crypto assets, does not have a method for increasing its circulating supply.

FAQ

Is ChainLink open-source?

Yes, ChainLink is an entirely open-source project that releases its code on GitHub under the MIT License.

Who is a member of the Chainlink network?

dApps, blockchains, node operators, and data suppliers, as well as a large development community, make up the ChainLink ecosystem.

What kind of value does ChainLink have?

ChainLink is more valuable than fiat currency because it is more useful. it is anonymous, decentralized, and irreversible. It can’t be depreciated or seized, and it can be easily transmitted anywhere in the globe.