Chainlink Introduction

What is Chainlink?

Chainlink is a decentralized network that acts as a bridge between blockchain technology and real-world data. It allows smart contracts on a blockchain to securely and accurately access off-chain data and computational resources, making it possible for these contracts to operate based on real-world events and information. In other words, Chainlink enables blockchain-based applications to interact with and respond to the external world, creating a more interconnected and functional ecosystem. This opens up exciting possibilities for the creation of new decentralized applications, particularly those that require real-time, accurate data inputs to function effectively.


Market size:

The whole DeFi ecosystem valued at ~$50b is the potential market for ChainLink.

In 2022, Chainlink enabled more than $6.9 trillion in transaction value and delivered $5.8+ billion on-chain data points with 1600+ projects in the Chainlink ecosystem.


Chainlink vs. Competitors:

Chainlink is competing against other Oracle Networks to get integrated and find partnerships. However, Chainlink has 22 times more partnerships and integrations than the four others combined.


Partnerships:

Chainlink has 1764 partnerships across DeFi, NFT, Gaming, and other categories.


Cross-Chain Interoperability Protocol:

CCIP Chainlink CCIP provides a cross-chain messaging framework for developers to build secure services and applications That can send messages, transfer tokens, and initiate actions across multiple networks, run by independent oracle nodes.


Data Using Decentralized oracles (DECO)

Everyone is talking about privacy and ZK-proofs, but most people do not realize that ChainLink’s DECO is a privacy-preserving oracle technology that utilizes ZKPs.

It allows data transmitted over the Internet to be confidentially attested to by oracles without the data being revealed to the public or to the oracle nodes themselves. With DECO (ZKPs), sensitive information can be proven without concerns about data privacy.


DECO (ZKPs) solves a large limitation with existing web communication standards, where users can privately communicate with a web server but cannot prove it to third parties. For example, this tech can bring a $200b unsecured personal loan market to DeFi.


Low-Latency Oracles In capital markets:

Firms need low-latency algorithmic trading systems to increase profitability and react to market events quicker. Faster data processing time allows that firms to catch events and profit from them before the market returns to normal.

As of today platforms like GMX can not offer low-latency trading and to protect LP from draining it has a small delay before the trade is executed. Low latency oracles would allow to remove this delay and attract more professional traders to the platform.

Chainlink’s low-latency oracle solution leverages high-speed data providers with Chainlink’s DON to deliver high-frequency pricing data off-chain, yet provide on-chain verification.


Fair Sequencing Services (FSS)

FSS is a transaction ordering solution that aims to mitigate harmful forms of MEV in order to help decentralized systems become fundamentally fairer. FSS aims to solve the problems of both high gas costs and unfair transaction ordering.


Verifiable Randomness Function:

Randomness is at the heart of massive markets, like the lottery market ($340B+), the video game industry (~$200B), and blockchain gaming ($5B). But legacy randomness is not provably fair, which goes against the core promise of Web3.

Chainlink VRF is the industry-standard source of provably fair and tamper-proof on-chain randomness for blockchain-based applications. For example, most of the web3 gambling protocols are using CL VRF to ensure the fairness of the game.


Chainlink BUILD:

Participating projects in BUILD commit to pay network fees and provide incentives (native tokens) to the service providers in the Chainlink community, such as Chainlink stakers.


Web3 is a multi-trillion-dollar opportunity for developers, startups, entrepreneurs, and established businesses who want to realize the power of cryptographic truth.

There are hundreds of trillions in transaction value yet to be transferred into DeFi and Chainlink positioned itself to capture a significant portion of the future capital migration into web3.

Thats a wrap, i could have gone on longer but with the info i have provided I’m sure you can now gather that Chainlink will play a big part in crypto for years to come.

Related Articles

Responses

image-popup
image-icon
UPGRADE YOUR SUBSCRIPTION
UNLOCK THIS CONTENT & MORE WITH OUR FREE 7 DAY TRIAL
START MY FREE TRIAL
*Trial requires a credit or debit card and gives you 7 days free access to all features of our platform, then $250.00AUD per month until cancelled. Cancel any time.