Chainlink - $LINK, Asset Review
Figure A
Chainlink is a blockchain that is solving problems with a decentralized oracle service. Its unique oracle service creates a bridge between blockchains and the real world to put out or receive accurate data. APIs and smart contracts are how Chainlink connects to the world to blockchains and vice versa. With Chainlink’s oracle service users can always have accurate data from weather reports to price information as cited from Ethereum. This cutting-edge technology will disrupt how certain data providers operate.
Content:General Information-What is Chainlink
Chainlink Background
Chainlink Funding/Collaboration
Token Information-Tokenomics
Staking
Additional Information-
What is an Oracle?
Technical Analysis
Conclusion
General Information-
What is Chainlink
Chainlink is the first of its kind blockchain, that has created a decentralized oracle service. Currently, smart contracts can’t interoperate from blockchain to blockchain. But with Chainlink’s oracle service, it connects blockchains that couldn’t interoperate before. Chainlink’s smart contracts users’ may utilize the oracles to receive information from the off-chain APIs. Once the information is passed from the off-chain network, it is set into the on-chain as seen in figure A above. Oracles offer breakthrough technology when it comes to providing accurate, fast, and reliable information.
2. Chainlink Background
Chainlink LTD is a project-based out of the Cayman Islands and founded by Sergey Nazarov & Steve Ellis in 2017. Both founders created a whitepaper discussing the Chainlink blockchain in collaboration with a Cornell University professor named Ari Juels. Ari Juels also famously worked on a trusted execution environment (TEE), which guarantees data is confidential and verifiable. The goal the founders had was to create a network that offered a decentralized, tamper-proof, and scalable solution for providing accurate data. By incentivizing oracles to provide accurate data, they earn $LINK tokens which we will touch on later in this article.
3. Chainlink Funding/Collaboration
Chainlink has been through a few funding rounds both seed funding and ICO with the following firms: Consensus Capital, One Block Capital, Outlier Venture, Framework Ventures, and more raising a total of $32 million according to Crunchbase. Chainlink has gained the trust of 1300 projects, has over 950 oracles delivering real-time data, and has secured over 37 billion dollars via Chainlink oracles. Chainlink has become the “go-to” blockchain when it comes to oracles. However, three partnerships stick out to me including Google Cloud, Swift, and Intel. Today, Swift is working with Chainlink to create its own Swift Smart Oracle that allows smart contracts on various networks to connect with over 10,000 banks. Also, Google Cloud has integrated Chainlink’s oracle middleware with its BigQuery enterprise cloud data warehouse, allowing for on-chain and cloud-based interactions with Ethereum dApps and Smart contracts. Finally, Intel has integrated an oracle solution via smart contracts to keep their confidential data off-chain, maintaining privacy. With all these unique integrations, it makes me believe that Chainlink will continue growing.
Figure B
Token Information-
1. Tokenomics
$LINK(Chainlink) is an ERC-20 token that is used on the Chainlink network. Currently, the total supply of $LINK is 1,000,000,000 with a circulating supply of 467,009,549. $Link is used as a payment token to pay oracle operators and may also be used to stake like a node operator. As for the distribution, 35% of tokens were allocated to token sale investors, 35% were reserved for node operations as rewards, and the remaining 30% was allocated to the parent company - SmartContract.com accordingly. At the time of writing, around 20% of the supply is held by the top 10 wallets.
Figure C
2. Staking
$LINK token holders may contribute to the network by staking. Staking rewards vary at the moment as there are limited options for staking Chainlink. However in the future, according to a blog posted earlier this month, rewards will range up to 5% for v2. Exchanges like Crypto.com, Binance, and Kucoin currently offer staking for $LINK but for their older version which will be soon replaced.
Figure D
Additional Information-
1. What is an Oracle?
The secret recipe of how Chainlink operates is through oracles. Oracles are bridges that connect the real world to the blockchain. Without an oracle, we cannot connect the modern world to blockchains. Oracles, may send and receive information acting as a bi-directional tool for transmitting data. It’s also important to note that the network relies on multiple oracles so that they can work together to put out the correct information. If the network relied on one oracle, that network is vulnerable to being hacked. So oracles are incentivized to operate together. At the time of typing this, 980+ oracles are operating.
Figure E
2. Technical Analysis
Figure F
$LINK has had an amazing run from $.12 to $53 yielding ~400x + returns! Ever since $LINK hit all-time-highs, we have seen the price fall towards a high time frame demand zone (blue box) which should act as a support region. Price is likely to consolidate in the blue box before making a new move. The way the correction subdivides will give hints on how the next move plays out. Bottom structures typically take a long time to form and reverse when the bears are exhausted, so it's best to stay patient for a clear pattern. All in all, the price action of this chart is very bullish over the long term, and holding the support will be crucial.
Conclusion-
Chainlink has easily become an innovative crypto that I will watch more closely. It is the first technology of its kind that offers an oracle service useful to many businesses. Chainlink has already made big strides into the modern-day finance world by working closely with Google, Intel, Swift, and even blockchain companies. The oracle service Chainlink offers speaks for itself as it is gaining more and more recognition. It is no question that Chainlink will continue to expand and become the “go-to” oracle network with this kind of momentum. In reality, they have been in business for five years and have made exponential growth. For these reasons shared, I believe that Chainlink is extremely bullish. Lastly, while I am excited to watch what Chainlink will do next, it is important to note that it isn’t correlated to the value of the $LINK token.