ChainLink Link DeFi Cryptocurrency Explained

Price and market capitalization of the ChainLink (LINK)

You will find below the main information concerning the LINK crypto-money with in particular :

  • The price: in dollars and in bitcoin, as well as the price variation over the last 24 hours,
  • The rank: world ranking of the LINK in relation to other crypto-currencies (the ranking is carried out according to the market cap of each crypto),
  • The market cap: it represents the capitalization of the ChainLink in dollars, i.e. the total value of all outstanding tokens,
  • The volume: which corresponds to the total amount of LINK tokens exchanged over the last 24 hours (in dollars).

How does LINK work?

The main purpose of ChainLink is to connect the on-chain world (on the blockchain) and the off-chain world (information not on the blockchain). To achieve this goal, the project will consist of two infrastructures: one on-chain and one off-chain.

On-chain functionalities

The first component of ChainLink is on-chain and consists of an intelligent contract deployed on the Ethereum blockchain. It is an “oracle contract” that will process requests from users who wish to obtain off-chain information. When a user wants to obtain off-chain information, he will submit a request to the ChainLink network via a user contract, and the blockchain will process this request through its own oracle contract.

This type of smart contract is responsible for matching requests with the appropriate oracles. The ChainLink oracle contract is actually composed of three different types of contracts:

  • The “reputation contract” which verifies the integrity of the oracle’s supplier.
  • The “order-matching contract“, or order management contract: it sets a price that is appropriate for the user and the supplier to obtain the information.
  • The “aggregating contract“: it analyzes the data received from the different oracles to try to find the one with the most relevant information.

With these 3 contracts, ChainLink’s on-chain function can begin its process in 3 steps:

  1. The selection of the oracle. When a request is submitted, the user inserts various parameters and certain criteria to be respected. He will then obtain results, and he can manually choose the oracles he considers the most interesting. He will also have the possibility to let ChainLink choose for him.
  2. Data transfer. When the oracles are chosen, the information obtained is transferred to the blockchain.
  3. Compilation of the results. If different oracles give different results, then the results are weighted. If the information is the same or if there is only one oracle, the information is taken as is.

Off-chain functionalities

The second component of ChainLink is off-chain and consists of “oracles nodes“, which are connected to the Ethereum network. For the moment, ChainLink only operates on the Ethereum network, but in the future it will be possible to operate on other networks, the project being agnostic as to the blockchain used.

The off-chain nodes work as follows:

  • They collect data from an off-chain resource as requested by the user contract.
  • Once the data is collected, the nodes process the data through the ChainLink Core, the central node that links the off-chain data to the blockchain used by the ChainLink network.
  • When the data is processed, the ChainLink Core transmits it to the “oracle contract”. As a “thank you” for the work done, the off-chain operator behind the oracle receives LINK tokens as a payment guide for collecting and sending the data.

In addition to managing this crucial part of the project, the off-chain nodes also allow developers to integrate so-called external adapters. Although it is not a perfect parallel, one can compare these external adapters with the decentralized applications of the Ethereum network.

These adapters are plugins that node managers can use to integrate a number of additional programs to improve their operation. In addition, they can perform subordinate tasks that streamline the data collection process.

Decentralization of the ChainLink protocol

Unlike other oracles that are centralized, the ChainLink protocol is completely decentralized. This solves the problem that centralized oracles can encounter that can provide inaccurate data. For example, if one receives a report on financial results, that oracle could alter that data if it had a bad intention or has been corrupted to provide false data.

To address this concern, ChainLink implements what it calls distributed sources and oracles. If an oracle wants to get a good reputation, it can extract its data from multiple sources. Moreover, when a user contract requests the network, this request is outsourced by several off-chain “oracle nodes”.

Thus, each oracle will fetch its information from different locations. The “oracle contract” will then compile these different data and give an average value if the information does not match.

The advantage of using such a system is that the different oracles have no interest in falsifying their information. ChainLink will indeed detect those who give false information and may penalize them by not paying them or by damaging their reputation on the network.

LINK Usecases

The LINK token is an ERC-677 token (based on the ERC-20) and is used to pay for the operating costs of the network :

  • The nodes that will fetch the information off-chain.
  • The transformation of the data format to make it understandable by the blockchain.
  • The calculations that are performed off-chain.
  • An intelligent contract of a network such as Ethereum which will want to use a node of the network to get information.

ICO and distribution of LINK tokens

The project’s CIO ended on September 19, 2017 and raised $32 million.

The LINK tokens were distributed as follows:

  • 35% were sold to the public.
  • 35% will be used as a reward for the node managers.
  • 30% will go to the company to help with the ongoing development of the project.

Team and Partners

ChainLink has a multidisciplinary and complementary team. Here are the main members of their team:

  • Sergey Nazarov – CEO: he started his career at FirstMark Capital before joining the world of cryptocurrency in 2011. He believes that blockchain technology will change the way the company will distribute wealth, how contracts are negotiated and how information is shared.
  • Steve Ellis – CTO: Former engineer and team leader at Pivotal Labs, where he worked on system security and scalability.
  • Mark Oblad – Chief Operating Officer: Mark began his career at Gunderson Dettmer helping to manage the growth of the world’s leading hedge funds. He then went on to build Valcu, a leader in contract automation software, where Mark saw the tremendous potential of smart contracting.
  • Dan Kochis – Head of Development and Partners: Dan has a long experience in negotiating deals that help companies continue to grow. He was part of the Alibaba team that negotiated its first U.S. acquisition.
  • Adelyn Zhou – Director of Marketing: Adelyn has experience in growth marketing and helped her former company to be purchased by Amazon. She is also an expert in applied artificial intelligence and believes that smart contracts can make a huge contribution in this area.
  • Thomas Hodges – Integration engineer: Thomas is an experienced integration engineer who helps companies deploy new programs for their customers.
  • Rory Piant: Community manager
  • 3 software engineers: Dimitri Roche, Alex Kwiatkowski, and John Barker.
  • 6 advisors: Ari Juels, Andrew Miller, Evan Cheng, Hudson Jameson, Jake Brukhman and Brian Lio.

Here are 2 partners of the ChainLink team:

  • zeppelin_os. It is a company that makes the development of smart contracts faster, easier and more secure.
  • Town Crier. It’s a company that wants to put intellectual property patents on the chain.
  • and many others here

Benefits

  • The project wants to facilitate the acquisition and integration of off-chain information in a simple and efficient way.
  • Possibility to insert the criteria of our choice to choose the oracles.
  • The oracles receive marks reflecting their reputation, which will dissuade them from transmitting false information for fear of no longer being chosen and therefore no longer receiving a LINK token as payment.
  • The weighting of the information provided by oracles when they are not completely identical.
  • The development team is ideally suited for the implementation of such a project.
  • The project is agnostic about the blockchain used. Eventually, its oracle system will be able to work with other blockchains than Ethereum.
  • Possibility to add “adapters” to improve the efficiency of some processes.

Disadvantages

  • Very little marketing around the project.
    Only 35% of the tokens were sold to the public.
  • The development team does not communicate much about the project’s progress.
  • Competitors have appeared on the market and seem to achieve their goals much faster.

How do I buy ChainLink (LINK)?

To purchase LINK, you must go to Binance or COSS. It is also possible to buy LINK on a decentralized exchange such as Uniswap.

You can also buy tokens on other more exotic exchange sites, but we advise you not to use these sites.

You can find all the LINK market pairs on coingecko here.

How to store my ChainLink (LINK)?

The safest way to store ChainLink tokens is to use a hardware wallet. These are electronic wallets in the form of USB keys. The 2 most well known are the Nano S Ledger and the TREZOR.

Since the ChainLink is an Ethereum token, it is also possible to store the LINKS on wallets such as MyEtherWallet (MEW) or Metamask.

LINK notes and opinions

ChainLink is an interesting project that can bridge the gap between off-chain and on-chain information by providing users with easy access to oracles. It also solves one of the major problems with oracles: their reliability.

The design of ChainLink is such that most of the problems that such a project may encounter have already been solved. It will be possible to improve the efficiency of certain processes through “adapters”, bad oracles will receive a bad grade and will not be chosen in the long run, a weighting of the results will be carried out when several oracles have different information, etc.

However, a big black point of the project must be underlined: the distribution of the tokens. The investors who financed the project at the ICO have only 35% of the total tokens. It is absolutely outrageous and hard to understand that some people have accepted this.

If you want to use ChainLink to get off-chain information easily and you are content to buy LINK tokens just for that purpose, this shameful distribution is not necessarily a concern for you. On the other hand, if you wish to invest in the project as a speculator, we advise you to simply pass on your way to disagree with such a token allocation. You might even want to look at ChainLink’s competitors, who seem to be making great strides.

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