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Chainlink is a decentralized oracle network that uses tokens to bridge the gap between smart contracts and real-world data. It held an ICO (Initial Coin Offering) in 2017. Chainlink recently hit a high of $35.89 on February 20th, 2021, but then declined slightly to its current price per token at the time of this writing, which is $28.50. Chainlink was one of the tokens that had exponential gains from the Defi craze of 2020 and early 2021, increasing in value by 1208.83% YTD.
Dev Team
Chainlink was developed by Sergey Nazarov, with co-founder Steve Ellis. Sergey has been involved in smart contracts for some time and is becoming a much more familiar face in the crypto community. Steve Ellis had previous experience as a software engineer before coming onboard to work on Chainlink. Much of the other developers are not publicly known.
Sergey Nazarov
Coin Economics
Chainlink has a max supply of 1 billion tokens, which is approximately 38 times larger than the token supply of bitcoin. Were Chainlink to reach bitcoins current market cap (1.1 trillion), it would be worth about $1103 per token, assuming every token had been released.
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During the ICO, tokens were distributed as follows.
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Because of the set token limit in Chainlink, are no plans for any inflation. Over time, this will make chainlink a deflationary asset due to it’s programmed scarcity (assuming its value remains constant or increases).
Chainlink API
Chainlink API functions as an oracle – which is basically a system that takes in valid inputs and provides external data to trigger smart contract executions. To do this, chainlink has two systems in place, on-chain and off-chain.
All smart contracts on Chainlink are externally aware and can interact with information outside of their environment through the Chainlink oracle. They are also able to integrate with non-blockchain applications because of this (hence the name “Chain-link”). The on-chain infrastructure helps to create the initial oracle record. Once this record is created it’s terms are executed off-chain and then reported back to the on-chain infrastructure. Currently Chainlink’s API only works for Ethereum but there are plans to integrate it as a solution across other blockchains as well.
Use cases
Surprisingly, this has many use cases – especially in decentralized finance applications – which require valid inputs from external financial data in order to function at scale. Chainlink has already been integrated across several of these platforms including AAVE (a lending protocol), UNI (a DEX), and Celsius – all of which are available widely through coinbase and other exchanges. Because Chainlink is already integrated into successful projects, there is a favorable outlook for it to continue its current path of growth during this bull market.
Controversy
Chainlink hasn’t had much controversy, however, the one thing I would point out is that during the initial coin offering, the allocation made to the developers was higher than usual. However, Chainlink has been around for 3 years now and shows no signs of slowing down, so I highly doubt it is an exit scheme. But investors should keep this in mind.
Conclusion
In conclusion, Chainlink is a useful technology that will help bring DeFi to the masses, as well as help it perform at scale. If you liked this post, please like and follow this account! I post a lot about crypto in general and will be reviewing 10 coins over the next 10 weeks.