Chainlink current price is $21.650 with a marketcap of $9.42 B. Its price is -9.64% down in last 24 hours.
- Chainlink (LINK)
- Live Price $21.650
- 24h % -9.64%
- Market Cap$9.42 B
- Volume$889.15 M
- Available Supply433.51 M LINK
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Based on Oracle, Chainlink is a blockchain platform of decentralized networks working to give real-time data to smart contracts between businesses or corporations. Chainlink was a project, created back in 2015 by CEO Sergey Nazarov that focuses to bridge gaps between legacy payment services, financial institutes like banks and blockchain cryptocurrencies like Bitcoin and Ethereum.
It has its own digital asset tokens called ERC-20 LINK, which were launched during a 2017 ICO sale. You can use these tokens to pay for services on the platform.
Initially, smart contracts were based on centralized Oracles. This was against the nature of a decentralized financial space and freedom. During this period, communication issues with off-chain and on-chain parties led to a lot of disturbances in the smart contract development. This centralized oracle system creates huge trust-deficits and can potentially put a lot of money at risk in case of failure. Therefore, the problem was solved using Chainlink with decentralized Oracle networks.
Oracle networks are used at intermediaries or mediums of injecting real-world, real-time data into the blockchain in a Decentralized Finance environment. This data could from anything whether it’s a price feed, result of a sports event or weather forecast. Businesses working on a decentralized finance ecosystem require the most reliable data and oracles verify that data for them to prevent smart contract catastrophes.
Nodes of decentralized Chainlink networks are subsidized so that the information they validate into and out of the blockchain can reach a consensus. On the other hand, miscreants are fined for foul play when their data keeps getting rejected and is not verified or consented to by the network. This adds to the security of using a decentralized Chainlink network.
Chainlink aims at bridging a connection between on-chain and off-chain resources. In this regard, 2 primary elements to the chainlink structure appear as an on-chain infrastructure and an off-chain infrastructure.
The pieces of the off-chain link architecture comprise Oracle nodes that reside out of the chain-link network. However, these nodes are still connected to an external blockchain. Most of the work done by the off-chain Oracle is completed through the collection of the data demanded by the user. Requested data passes through the chainlink core, which is the software that establishes a connection between the off-chain data and the chainlink network. The chainlink core receives the processed data at that point and sends it to on-chain Oracle. The payment that the off-chain nodes receive is in the form of linked tokens. A secondary function of the off-chain nodes allows them to be useful to developers. The nodes also integrate external adapters to perform subtasks on external nodes, making collecting and processing data easier.
The on-chain smart contracts are the piece of the chainlink architecture that houses Oracles. These Oracles accept and process data requests created by the user. User requests are taken by on-chain Oracles, which are then processed and submitted to the blockchain. The requests are routed to the appropriate smart contracts which match the request up with the correct off-chain data. Three types of contract help to match the on-chain and off-chain data – aggregating contacts, reputation contracts, and order matching contracts. An aggregating contract gathers data from the selected Oracles then delivers the best results to the contract requesting the data. The reputation contract determines that the Oracle provider is reputable and trustworthy. Based on the data requested, the order matching contract then passes the requesting contract on to the corresponding Oracle.
Chainlink's goal is to contribute to any Oracle network using the data sets they have already established. These data sets are for any users to incorporate into their smart contracts. They are working on developing large amounts of data sets so that they know users' needs. Because people are building markets around these data sets, chainlink can provide users with secure data set reference users' needs. They can replicate the Oracle networks to expand to other data sets to make people build markets around them. It creates varieties of clients who can use the chainlink system using high-quality node operators that can add more security to Oracle networks.
Chainlink also focuses on new types of activities like – fraud-proof gaming, decentralized insurance, decentralized finance, and many others. These links have a pretty popular token and they have extensive trading volume.
Blockchains that are used in smart contracts for businesses or corporations have an ability embedded in their code to request and receive data using the Chainlink Requesting Contract. This request to retrieve data from sources is called an ‘event’ and the Chainlink network then registers it on the record. After that, the network creates an agreement to let users access and use data present off-chain. This agreement is known as the Chainlink Service Level Agreement Contract (SLA).
This agreement contract SLA contains 3 underlying contracts.
Chainlink Reputation Contract
To track the node performance and to check whether the data being used is reliable or not, the Chainlink network uses Chainlink Reputation Contract. This contract filters out any miscreants, suspiciously acting individuals or nodes so that the data being received by the smart contracts is authentic and dependable for decision-making within the smart contract framework.
Chainlink Order-Matching Contract
In order for the Chainlink network to fetch the requested data for smart contract actions, the Chainlink Order-Matching Contract prompts the appropriate nodes in the network to send in the data.
Chainlink Aggregating Contract
Using the Chainlink Core software, the Aggregating Contract translates data to be used among the parties while organizing, authenticating and unifying any requests for data from the concerned parties in the contract. This validated and organized data can then be sent to an API and back to the Aggregating Smart Contract.
Chainlink is no doubt solving a pertinent problem. As blockchains try to solve a real-world problem, they will need access to off-chain data. Chain-link offers them a secure and decentralized solution. Moreover, it can connect smart contracts with another one, which is a great way to increase interoperability between blockchains. Through chainlinks anyone can create secure, smart contracts with the ability to access key external data. It also allows smart contract developers to receive financial rewards. However, chainlink is offering a unique solution to a problem that is likely to become more pressing as blockchain technology expands. So, having the concept of chainlink explained is definitely a project to keep your eye on!