What the heck is Chainlink (LINK) ?
Chainlink was founded in 2017 by Sergey Nazarov, with Cornell Professor Ari Jules as a technical advisor. Chainlink itself isn’t a blockchain. Chainlink is an Oracle network which can run on multiple blockchains. So what is an Oracle? In short, Oracles provide a bridge between blockchains and real world data.
Take for example a decentralized sports betting application. The application would operate with smart contracts on a smart contract capable blockchain (such as Etherium). The application would rely on an Oracle to retrieve sports scores from the real world and provide the data to the smart contract. That is the type of role that Chainlink is designed to fill.
Other examples of external sources which Chainlink could pull might be weather data, fiat currency data, commodity prices, or votes in an election. Oracles are absolutely essential in blockchain adoption and mass use, and Chainlink is highly regarded in this space.
Chainlink oracles currently run on the following blockchains:
• Etherium
• Binance Smart Chain
• Solana
• Heco
• Xdai
• Fantom
• Polygon
• Avalanche
One of the biggest adopters of Chainlink is Google, to integrate their BigQuery data analytics platform.
As for tokenomics, LINK has a current circulating supply of 426M coins, with a maximum of 1 billion coins. The current market cap as of this writing is 18B. The LINK token is used to compensate node operators. If a node operator is found to have provided bad data, the tokens from that node are re-distributed among nodes found to provide good data. In this way, providing accurate data is highly incentivized.
Chainlink staking functionality isn’t implemented – though you can stake LINK through node operators. There are plans to enable staking in the near future.
One of the largest criticisms of Chainlink is the large number of tokens still held by the team behind the project – estimated at 30%. This doesn’t include Node operator incentives (35%). These are just tokens held by the team. Despite this, Chainlink has maintained consistent positive price action.. but the allocation is concerning.
For this reason, I have a relatively small percentage of my holdings in LINK. Overall I like the project, and I do expect that it will continue to reward investors for the foreseeable future.
Take for example a decentralized sports betting application. The application would operate with smart contracts on a smart contract capable blockchain (such as Etherium). The application would rely on an Oracle to retrieve sports scores from the real world and provide the data to the smart contract. That is the type of role that Chainlink is designed to fill.
Other examples of external sources which Chainlink could pull might be weather data, fiat currency data, commodity prices, or votes in an election. Oracles are absolutely essential in blockchain adoption and mass use, and Chainlink is highly regarded in this space.
Chainlink oracles currently run on the following blockchains:
• Etherium
• Binance Smart Chain
• Solana
• Heco
• Xdai
• Fantom
• Polygon
• Avalanche
One of the biggest adopters of Chainlink is Google, to integrate their BigQuery data analytics platform.
As for tokenomics, LINK has a current circulating supply of 426M coins, with a maximum of 1 billion coins. The current market cap as of this writing is 18B. The LINK token is used to compensate node operators. If a node operator is found to have provided bad data, the tokens from that node are re-distributed among nodes found to provide good data. In this way, providing accurate data is highly incentivized.
Chainlink staking functionality isn’t implemented – though you can stake LINK through node operators. There are plans to enable staking in the near future.
One of the largest criticisms of Chainlink is the large number of tokens still held by the team behind the project – estimated at 30%. This doesn’t include Node operator incentives (35%). These are just tokens held by the team. Despite this, Chainlink has maintained consistent positive price action.. but the allocation is concerning.
For this reason, I have a relatively small percentage of my holdings in LINK. Overall I like the project, and I do expect that it will continue to reward investors for the foreseeable future.
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