Chainlink (LINK)
Chainlink is a decentralized oracle network designed to connect off-chain data with on-chain applications, bridging the gap between blockchain technology and real-world information.
History of Chainlink
Chainlink was developed by Chainlink Labs, formerly known as Smart Contract Ltd., and was founded in September 2014 by Sergey Nazarov and Steve Ellis. Initially supporting Ethereum, Chainlink has expanded to integrate with other blockchains and layer 2 networks like Polygon, BNB Chain, Avalanche, and Arbitrum. LINK is the native token of the Chainlink protocol and operates on a proof-of-stake consensus mechanism.
On September 19, 2017, Chainlink raised $32 million through an initial coin offering (ICO), selling over 350 million LINK tokens. Chainlink has collaborated with major organizations such as AccuWeather, FedEx, FlightStats, and the Associated Press. On October 21, 2021, Chainlink partnered with the Associated Press to provide its datasets on blockchains. Chainlink Labs joined the Hedera Governing Council on May 21, 2021, and integrated its oracle services into Hedera's Token Service (HTS).
Chainlink Protocol announced its long-term objectives and new roadmap on June 7, 2022, marking the beginning of "Chainlink Economics 2.0" and introducing staking for LINK holders. By 2022, Chainlink had access to over 1 billion data points and managed $75 billion in value through 1,000 projects across 700 oracle networks.
In 2023, Chainlink and Arbitrum brought Chainlink VRF to Arbitrum One, enhancing randomness security for applications. On July 17, 2023, Chainlink's Cross-Chain Interoperability Protocol (CCIP) was launched for early access users on multiple blockchains, including Avalanche, Ethereum, Optimism, and Polygon.
Overview of Chainlink
| Ticker | LINK |
| Category | Business Services |
| Website | https://chain.link/ |
| @chainlink | |
| Telegram | chainlinkofficial |
| https://www.reddit.com/r/Chainlink/ | |
| Contract Addresses | |
|---|---|
| ethereum | 0x51...ca Copied! |
| fantom | 0xb3...c8Copied! |
| optimistic-ethereum | 0x35...f6Copied! |
| near-protocol | 51...arCopied! |
| huobi-token | 0x9e...42Copied! |
| xdai | 0xe2...b2Copied! |
| arbitrum-one | 0xf9...b4Copied! |
| polygon-pos | 0x53...39Copied! |
| harmony-shard-0 | 0x21...aaCopied! |
| avalanche | 0x59...a3Copied! |
| osmosis | ib...49Copied! |
| milkomeda-cardano | 0xf3...c2Copied! |
| energi | 0x68...08Copied! |
| sora | 0x00...5aCopied! |
| binance-smart-chain | 0xf8...bdCopied! |
Chainlink serves as a decentralized oracle network, providing a data stream to smart contracts on various blockchains. The system enhances smart contract capabilities by incorporating external data sources. Through Chainlink oracles, smart contracts access off-chain data, enabling new applications like prediction markets by aggregating verified knowledge on-chain from trusted sources. Since blockchains are inherently trustless, integrating outside data requires a trusted oracle source. Chainlink's decentralized network verifies oracle integrity, matches orders, and aggregates results to ensure data validity.
Chainlink's design is modular and flexible, allowing smart contracts to be upgraded through a migration function.
Chainlink oracles
Oracles are key components that allow blockchains to access external data. They verify real-world occurrences through trusted sources and submit this information to blockchains for use in smart contracts. Chainlink's framework evaluates oracle trustworthiness to ensure reliability, as smart contracts may execute automatically based on conditions met by the data provided.
Use cases of Chainlink
Decentralized finance (DeFi)
Chainlink is a standard oracle network for DeFi, enabling anyone to build DeFi applications. Its decentralized structure ensures data security and quality by aggregating information from multiple authenticated APIs.
Chainlink powers numerous DeFi applications through its decentralized services, with integrations including Aave, Compound, Synthetix, and more. It connects hybrid smart contracts with high-quality data and off-chain computation, securing tens of billions of dollars within the DeFi ecosystem.
Enterprise applications
Chainlink connects enterprises to the blockchain economy, enabling secure integration of existing systems with major blockchain networks. Enterprises can generate new revenue streams by operating Chainlink nodes, providing hybrid smart contracts with secure real-world data.
Notable enterprises using Chainlink include LexisNexis, Swisscom, AccuWeather, and the Associated Press.
Insurance
Chainlink supports blockchain-enabled insurance by providing secure access to real-world data and off-chain computation. It allows for the creation of secure parametric insurance products and enables developers to monetize their data by selling it to blockchain-based insurance projects.
NFTs and blockchain games
Chainlink enhances NFT and blockchain gaming projects by powering applications with dynamic and fair gameplay. It ensures the security and uniqueness of digital assets and provides on-chain randomization to meet governance requirements in DAOs.
Social impact
Chainlink supports blockchain innovations for social change, helping organizations and institutions promote financial inclusion, environmental sustainability, and the common good.
Climate markets
Chainlink is a standard for on-chain climate data, supporting enterprise-grade middleware for high-integrity, interoperable climate markets. It connects carbon markets and brings transparency to climate commitments.
Chainlink token (LINK)
LINK is an ERC-20 token with ERC-223 functionality, enabling single-transaction token receipt and processing by contracts. It serves as the payment currency for Chainlink node operators. The LINK token's demand correlates with the number of operators providing off-chain services, reflecting platform usage.
Token distribution
During the September 2017 ICO, 350 million LINK tokens were sold at $0.11 per token. 35% of the total token supply is allocated to node operators and ecosystem incentivization, 35% was sold in public sales, and the remaining 30% supports Chainlink ecosystem development.
Uses of LINK
- Internal payment: LINK compensates Chainlink node operators for their services.
- Staking: Node operators stake LINK to participate and provide data services. Higher stakes increase selection chances for data provision.
Chainlink ecosystem
The Chainlink ecosystem is powered by a large open-source community, including data producers, node operators, developers, and researchers.
Data providers
Data providers sell existing data and API services to oracle networks, expanding their business into the smart contract economy with minimal costs. Chainlink manages node operations and cryptocurrency payments, allowing providers to focus on high-quality data delivery.
Node operators
Node operators are central to the Chainlink network, maintaining the oracle infrastructure for secure access to real-world data across all blockchains. They earn revenue by providing oracle computation to smart contracts on any blockchain.
Chainlink products
Market and data feeds
Chainlink offers decentralized, high-quality data feeds for various sectors, including DeFi, sports, and weather. These feeds provide reliable off-chain data for unique smart contract use cases.
VRF (Verifiable Random Function)
Chainlink provides a tamper-proof random number generator for blockchain gaming and NFT projects. Chainlink VRF ensures random values and cryptographic proofs are verifiable on the blockchain, supporting applications like games and NFTs.
Automation
Chainlink offers reliable decentralized automation for smart contracts, enabling Web3 developers to automate key functions efficiently.
Proof of reserve
Chainlink provides autonomous, reliable audits of on-chain and off-chain reserves, enabling the monitoring of reserve assets through automated cryptographic audits.
Cross-chain communication (CCIP)
Chainlink facilitates cross-chain applications with its Cross-Chain Interoperability Protocol (CCIP), enabling secure services and applications to transmit messages and tokens across networks. CCIP's collaboration with SWIFT aims to connect multiple blockchains and bank chains.
Chainlink architecture
Requesting contract and interface
Chainlink acts as secure blockchain middleware, with nodes responding to data requests from user contracts. The system includes a reputation contract, order-matching contract, and aggregating contract to ensure oracle trustworthiness and data accuracy.
Off-chain architecture
Chainlink's off-chain components include oracle nodes harvesting