After Bitcoin’s successful implementation of blockchain technology, multiple blockchains and associated cryptocurrencies have sprouted in recent years. Each blockchain has products and services associated with it and hence a requirement for an aggregator of data that the blockchain can trust came about. In this article, we understand the role of oracles and Chainlink’s trajectory, in particular.
Most of the contract based platforms are built over individual blockchains which are often isolated from external data feeds. Consequently, smart contracts cannot be used to access real-world data such as APIs, or information from banking systems. This problem is solved using oracles that can find, verify and submit real-world data to smart contracts. But the majority of the oracles are centralized and are no more secure than the traditional legal agreements. This is where ChainLink steps in.
Chainlink (ticker LINK) is a decentralized oracle platform that connects blockchain to external sources such as payment methods, data feeds, and events that aren’t native to the blockchain. Chainlink allows smart contracts to interface with real-world datasets in a secure way via its decentralized oracles. It provides tamper-proof, reliable sources of inputs and outputs on any blockchain. It uses an off-chain and on-chain infrastructure to facilitate the information flow on and off the blockchain.
Chainlink can be used in various industries such as insurance, securities, supply chain, payments and others, wherever the proof of events and data stamps are required.
LINK is the native token of the Chainlink platform created to pay node operators within the system. The total and maximum supply of LINK tokens is fixed at 1 billion tokens. Of the total 1 billion tokens, 35% of the token supply will go towards node operators and will be used for incentivizing the Chainlink ecosystem. 35% of the tokens will be distributed via public sale events and the remaining 30% for the continued development of the network.
As of today, 46% of the LINK tokens are in circulation. LINK started 2021 at about $11 per token and is currently trading at near $30. Considering how other major altcoins have performed this year, LINK has not been at its best. However, LINK continues to be a top 20 cryptocurrency and is poised to grow well in the upcoming future.
Source: TradingView, Binance
LINK has exhibited strong bullishness this week, hitting new local highs of nearly $34 on the back of an overall uptrend in the crypto market. Today’s brief crash sent it to the $28 support level, where it is currently rangebound. LINK is trading below several key metrics - its 20 day, 50 day, and 100 day moving averages, will need longer timeframe closes at these levels to upkeep the bullish trend. It is also likely to find strong support in the $26 region should it dip further.
LINK has locked in many partners and continues to the leading oracle service. In 2021, more than 300 partnerships have been locked in so far with the biggest being Cardano, Hedera and Arbitrum. Overall, with nearly 900 partners, Chainlink is growing a robust ecosystem that is future-proof.
With the altcoin market booming in Q4 2021, LINK may well be headed to its ATH of $53 in the near future.
Disclaimer:This article was authored by Giottus Cryptocurrency Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.