What Is Chainlink (LINK)?

Chainlink (LINK)

Chainlink, established in 2017, stands as a revolutionary blockchain abstraction layer facilitating universal connectivity for smart contracts. Functioning through a decentralized oracle network, Chainlink empowers blockchains to securely interact with external data feeds, events, and payment methods. This interaction is vital for the execution of complex smart contracts, solidifying their position as the predominant form of digital agreements.

Community-Driven Network

At the core of the Chainlink Network is a vibrant open-source community comprising data providers, node operators, smart contract developers, researchers, security auditors, and more. The emphasis is on ensuring decentralized participation for all node operators and users contributing to the network.

Founders of Chainlink

Chainlink Labs, the force behind Chainlink, was co-founded by Sergey Nazarov and Steve Ellis. Sergey Nazarov, the CEO, holds a degree in business administration from New York University, with a focus on philosophy and administration. Steve Ellis, with a degree in computer science from New York University, contributes his expertise to the platform's development.

Unique Features of Chainlink

Chainlink's uniqueness stems from being one of the pioneering networks facilitating the integration of off-chain data into smart contracts. Boasting trusted partnerships with data providers like Brave New Coin, Alpha Vantage, and Huobi, Chainlink attracts significant attention. Data providers can directly sell access to their data to Chainlink, creating a monetization avenue for valuable information.

As a decentralized network, Chainlink invites users to become node operators, earning revenue by contributing to the critical data infrastructure required for blockchain success. The extensive network of node operators collectively powers decentralized Price Feed oracle networks, securing billions in value for leading DeFi applications such as Synthetix, Aave, and Compound.

LINK Staking for Decentralization

Recognizing concerns about centralization, Chainlink is introducing LINK staking to address this issue. LINK staking involves participants locking up their LINK tokens as collateral, providing a mechanism for rewards and penalties. This system aims to incentivize proper node operation, enhance task allocation to node operators, and secure the Chainlink oracle network.

Token Metrics: LINK Circulation

During the initial coin offering (ICO) in September 2017, Chainlink announced a total and maximum supply of 1 billion LINK tokens. As of end-September 2021, about 45% of the total supply, approximately 453.5 million LINK tokens, are in circulation. The ICO distribution allocated 35% of LINK tokens to node operators and ecosystem incentivization, 35% during public sale events, and the remaining 30% to the company for ecosystem and network development.

Security of Chainlink Network

Chainlink, as an Ethereum-based ERC-20 token, operates on the proof-of-stake (PoS) consensus mechanism. Unlike proof-of-work (PoW) used by Bitcoin, PoS relies on the amount of staked tokens for selecting node validators. This model is energy-efficient and scalable, aligning with the growing trend in the blockchain space.

Where to Buy Chainlink (LINK)

Chainlink and the LINK token are widely available on various exchanges, with Binance being a notable platform for LINK trading. Other exchanges facilitating LINK trades include Huobi Global, Coinbase Pro, Gate.io, and Kraken. It's crucial to acknowledge the risks associated with cryptocurrency investments.

Chainlink and Google: Staking in 2022

Chainlink's journey involves substantial growth, collaborating with mainstream entities like AccuWeather, FedEx, and the Associated Press. Noteworthy is the addition of Eric Schmidt, former Google chairman and CEO, as a technical advisor to Chainlink. Schmidt envisions Chainlink unlocking the potential of smart contract platforms.

In the pipeline for 2022 is the introduction of LINK staking, a culmination of years of work on a staking solution. This move aims to enhance the security and scalability of the consensus mechanism, fostering the decentralization of the Chainlink oracle network.

Securing the Chainlink Oracle Network With Staking

December 2021 marked the introduction of LINK staking to reinforce the sustainability and security of the Chainlink oracle network. This initiative enables participants, including node operators and community members, to contribute to the network's security by staking LINK tokens. The staking program is expected to evolve through various versions, with the 2.0 version marking the official launch of Chainlink Economics 2.0.

In Sergey Nazarov's perspective, the Chainlink Economics 2.0 era signifies a societal shift towards cryptographically guaranteed systems, where cryptographic truth prevails in proving events, data feeds, and computations within trust-minimized applications.

Conclusion

Chainlink's journey encompasses not only the facilitation of smart contracts through decentralized oracles but also a commitment to decentralization, community participation, and innovative solutions like LINK staking. As the Chainlink network continues to evolve, it remains a key player in shaping the future landscape of blockchain applications and decentralized finance (DeFi).