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by Hideo Nakamura
Rank #18
Chainlink (LINK)

Chainlink LINK

$ 14.83
0.00022867 BTC
Marketcap
$ 8,712,580,164
Volume (24h)
$ 325,945,840
Circulating Supply
587,099,971 LINK
Total Supply
1,000,000,000 LINK
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All time high price: $ 52.70 71.86%
All time high date: May 10, 2021
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* Currency in USD
Historical Price for Chainlink
DateOpenCloseHighLowVolume
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Chainlink (LINK) price has increased 5.74% today!

Chainlink (LINK) is a cryptocurrency that operates on a blockchain. Currently, it is trading at $ 14.83 and a market capitalization of $ 8,712,580,164. The price of Chainlink has increased 5.74% in the last 24 hours. Currently, Chainlink ranks #18 among all cryptocurrencies by market capitalization and has a daily trading volume of $ 325,945,840.

What is Chainlink?

Chainlink is a framework for building Decentralized Oracle Networks (DONs) that bring real-world data onto blockchain networks, enabling the creation of hybrid smart contracts. These DONs provide decentralized services such as Price Feeds, Proof of Reserve, Verifiable Randomness, Keepers, and the ability to connect to any web API. 

It aims to ensure that the external information (pricing, weather data, event outcomes, etc.) and off-chain computations (randomness, transaction automation, fair ordering, etc.) fed to on-chain smart contracts are reliable and tamper-proof.

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Chainlink oracle networks are blockchain-agnostic and are incentivized through the native LINK token, used for node payments and network collateral. 

Watch a video to learn about Chainlink.

A brief history of Chainlink

Chainlink is an open-source protocol developed by Chainlink Labs (formerly Smart Contract Ltd.), founded in 2014 by Sergey Nazarov and Steve Ellis. 

The Chainlink Network went live on the Ethereum mainnet on June 1st, 2019 and has since expanded to support additional blockchains and layer 2 networks such as Polygon, BSC, Avalanche, Arbitrum, and more.

What is the purpose of Chainlink?

To understand the purpose and function of Chainlink, we will split it into two sections:

  • The Chainlink Network
  • The Chainlink (LINK) token

The Chainlink Network

Before we dive into the function of the Chainlink Network, we need to understand the basics of smart contracts and how oracles work. 

Smart contracts are programmatic code (if x event occurs, execute y action) that operate on a blockchain network. However, due to the security model of blockchain networks, smart contracts are isolated from the external world and cannot natively connect to off-chain systems. 

To overcome this problem, an additional piece of infrastructure is required known as an “oracle” which relays data from the real world onto blockchain networks, where it can be consumed by smart contracts. 

The Chainlink Network addresses this issue through Decentralized Oracle Networks (DONs) that consist of a network of independent oracle node operators that fetch, aggregate, validate, and deliver real-world data on-chain. Each oracle node can specialize in providing different decentralized services on the behalf of smart contracts.

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Chainlink DONs support two different ways of delivering off-chain data to on-chain smart contracts. This includes the basic request model and the decentralized data model. 

  • Basic Request Model: Smart contracts generate and submit a data request to Chainlink oracle nodes in one transaction and receive the response later in time within a separate transaction.
  • Decentralized Data Model: A shared data resource where Chainlink oracle nodes regularly update an on-chain reference contract with fresh data, allowing smart contracts to query and receive real-world data in a single transaction. 

The decentralized data model is powered by Chainlink nodes using the Off-Chain Reporting Protocol (OCR), where data is fetched and aggregated off-chain, before a single transaction is submitted on-chain containing each node’s signature and corresponding data point. 

The Chainlink Token (LINK)

LINK is an ERC-677 token that is used to incentivize the proper operation of Chainlink DONs. The token has also been bridged across multiple blockchains to enable native Chainlink oracle integrations.

The LINK token is used within the Chainlink Network for the following components: 

  • Node Operators Fees: Smart contracts are required to pay Chainlink nodes using LINK tokens to obtain access to real-world data and other oracle services. 
  • Implicit Staking: The current and future revenue of Chainlink nodes are denominated in LINK tokens, incentivizing the proper operation of the Chainlink Network.
  • Explicit Staking: Chainlink nodes in the future can be required to lock up LINK tokens as collateral to back their oracle services, which can be slashed for malicious behavior. 

Who uses Chainlink?

The Chainlink Network is used by smart contract applications that require access to real-world data and off-chain computations. The network is also used by data providers to monetize their datasets by selling their APIs to smart contract applications.

The most common use case includes securing Decentralized Finance (DeFi) protocols which require financial market data. The Chainlink Network offers a variety of on-chain data feeds that are used to secure tens of billions of dollars. Integrated applications include Aave, Compound, Synthetix, and more.

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