Chainlink is a blockchain-powered decentralized platform that employs third-party tools named oracles to get data from other blockchains. The network was founded in June 2017 by the non-profit company SmartContract with the leadership of Steve Ellis and Sergey Nazarov.
In September 2017 the firm held an ICO when it attracted $32 M with an entire supply of 1 B LINK tokens. The latter is the native cryptocurrency of the platform in which node operators get paid.
How does Chainlink run?
As the name suggests, Chainlink's goal is to tie blockchain and outer data or API (Application Programming Interface). For this purpose, the protocol uses oracles so that the data won't depend on one party and work smoothly in a decentralized environment.
The implementation of ChainLink involves on-chain and off-chain processes. Due to its smart contract structure, the protocol can integrate with non-blockchain apps as well.
On-chain and off-chain circuits are bounded and upgradable. Saying that Chainlink is decentralized means it gets data from various origins and processes it with a wide range of nodes. In networking, nodes are connection points that transmit the obtained data from one to another.
In Chainlink's case, the nodes manage oracles linked to Ethereum to get information like financial market data or the US election data from other sources. So, the platform can be useful for data suppliers and data consumers as well. For instance, the DeFi protocol, lending, and borrowing services provider AAVE uses it to define the entire value of the collateral. In 2019, Google reported that it would use Chainlink nodes in the cloud/blockchain apps built with Ethereum and Google Cloud. Electro-mobile company Tesla uses the protocol's technology to provide the users' access to their cars.
Therefore, the system supports connecting and developing diverse types of oracle interfaces, with the ability to set the structure of nodes, data sources, update frequencies, delivery methods, security parameters, and more.
What is the LINK and what is it used for?
Chainlink's in-built token LINK runs on Ethereum using an ERC677 model. It is supported by any ERC20-compatible wallet. LINK plays a key role for the system as node managers get paid through it. Besides, they can stake the tokens as a method to offer a bid to the interested acquirer of the data.
The costs for node runners' services are determined by the data providers or oracles when they introduce their bids. LINK is among the top 10 cryptocurrencies at the time of writing. Apart from staking, it is also possible to trade on different exchanges.
The total supply of the token is 1 billion. In terms of the ICO held in 2017, 35% that is 350 M LINK tokens were distributed. 350 M will be distributed to node operators, and the left 300 M (30%) is meant for further advancement.
An important fact to note is that LINK has no mining or staking options that extend its flowing supply.
LinkPool is a platform that allows staking LINK tokens and earning returns without running a node. It is a node service provider that introduces a decentralized application (dapp) that is easy to use.
The work is carried out via an Ethereum smart contract that serves as a Chainlink node’s wallet address. Users can stake tokens to the address and withdraw them at any time.
It is expected that there will be more staking alternatives for the LINK holders later.
Chainlink has its own place in the world of decentralization. The protocol plays an important role in creating a bond among blockchains and real-world data.
Leading digital currency investing services provider GrayScale launched the LINK investment Trust product in March 2021. The company also included the token in its Digital Large Cap Fund (GDLC).
The company keeps developing its services and is among the top promising networks of DeFi.