Welcome to the next edition of We Simplify Your Research covering Chainlink!
Since you might not know us by now, we will give you a short introduction:
We Simplify Tech is a new company focused on breaking down complex technical concepts and making them as easy to understand as possible. We do this mainly via one-pagers but also like to provide some added information in articles like this one.
In this article we give you two options to simplify your research:
Option 1: The simplest version – the Chainlink One-Page Review
Take a look at the One-Page Review on Chainlink right here and get a good overview about this project. It is currently available as night & day versions.
Option 2: The complete version – the Chainlink article
If you want to learn more about Chainlink go through the whole article and gather some additional information besides the information provided by the One-Page Review.
Chainlink in a nutshell
Chainlink is a general-purpose framework for building decentralized oracle networks that give smart contracts access to secure and reliable data inputs and outputs. Each network consists of a collection of independent node operators, a method for aggregating data, and pre-made “Chainlinks” that act as middleware. It can be used to connect to data providers, web APIs, enterprise systems, cloud providers, IoT devices, payment systems, reference price feeds, other blockchains and much more.
Chainlink has evolved from an initial concept to a fully executed and widely needed tool which expands the usefulness of smart contracts. This happened because it has grown the following key benefits:
- Highly decentralized and secure
Independent and geographically distributed teams of security-reviewed node operators run decentralized infrastructure
- High-quality data sources
Market data sourced from premium APIs provides full market coverage with rigorous validation before triggering your smart contracts
- Provable end-to-end security
Easily verifiable and immutable on-chain data provides unique reliability guarantees of provable end-to-end security.
- Maintained shared data resource
An open source community builds and funds the on-chain reference data resources for the long-term viability of your smart contracts.
- Ease of integration
Easily integrate Chainlink with just one line of code
Possible use cases
- Money and Finance
Summary: Smart contracts can use decentralized trust to bring determinism to the financial sector, eliminating the burdens of counterparty risk prevalent in probabilistic finance. Financial products can be automated and decentrally verified without the need for trusted intermediaries that have abilities to exert influence and syphon off value.
Examples: DeFi, derivatives, bonds, market data, remittances, tokenized assets, decentralized exchange
Summary: Given the wide variety of payment preferences around the world, smart contracts needs Chainlink to access to many types of payment options to adequately service global demand.
Examples: Bank payments, retail payments, cryptocurrency payments
Summary: Chainlink-enhanced smart contracts provide insurers greater transparency of the customer and shift the whole industry to a higher-trust-based relationship.
Examples: Car, home, life, health, flight, crop, large equipment insurance and reinsurance
- Enterprise systems
Summary: Chainlink facilitates connections to a variety of enterprise systems to enable communication between distributed ledger technology networks and established backend systems.
Examples: Cloud, SaaS, trusted execution environment, databases, BaaS
- Supply chain
Summary: Smart contracts can revolutionize auditing, as the manual sampling of inventories to verify the integrity of a financial statement is reasonably true, can now be automatically verified for each individual component in the process.
Examples: Quality control, trade financing
Summary: Smart contracts enable modernization of our critical infrastructure by transitioning and connecting outdated systems to the blockchain where it makes sense.
Examples: Internet & telecommunications, energy, water, waste management
- Regulated gambling
Summary: Smart contracts enable verifiably deterministic outcomes of betting results and provide true transparency that Internet gambling sites are operating with integrity.
Examples: Casino games, lottery & randomness, sports, prediction markets
Summary: Smart contracts offer new trust relationships between citizens and officials, as well as more efficient and transparent ways to regulate the market.
Examples: Regulation, voting, citizenship
- Authorization & identity
Summary: Chainlink-enhanced smart contracts enable access to trusted sources when they are needed before execution.
Examples: E-signatures, biometrics, statistics, credentials, intellectual property
Examples: Data monetization, satellite imagery & artificial intelligence (AI), time
Chainlinks core team consists of 50+ staff and advisors coming from various backgrounds who have founded and helped scale organizations such as Ethereum, Amazon, Facebook, DocuSign, Twilio, Pivotal Labs, and more. Besides the core team there is also a very active, large and growing community that supports the success of the open source Chainlink project.
The teams key benefits are:
- Good track record: Business proven entrepreneurs
- Great & fast growing business network: Chainlink has formed a huge ecosystem of partners and integrations since its founding and adds new ones at a high pace.
- Large dedicated and interdisciplinary team with more than 50 people: The team members have founded and helped scale organizations such as Ethereum, Amazon, Facebook, DocuSign, Twilio, Pivotal Labs, and more.
- Large & active community: Chainlink has a very large & active community which call themselves #linkmarines which already shows their dedication. Chainlink itself accelerates its adoption through active community participation in events like Hackathons or the Chainlink Community Grant Program.
Follow this link to learn more about the dedicated team.
Client and partner selection
Chainlink has used its network and first mover advantage to form a huge ecosystem with roughly 280 partners and integrations at the end of September 2020.
Some noteworthy mentions are:
- Large enterprises and consortiums such as Google, Intel, Oracle, SWIFT, BSN, IC3 and InterWork Alliance
- Various integrations like Polkadot, Tezos, Synthetix, Aave, Openlaw and Web3
- Chainlink develops alongside with Intel, Microsoft, IBM and others “Hyperledger Avalon” which aims to enable secure off-chain computations
Follow this link to learn more about the ecosystem.
Price & market share
Due to the first mover advantage Chainlink was able to secure plentiful partnerships and integrations. This combined with the recent DeFi hype is visible in the current price and market cap rank of Chainlink.
Real world adoption
Chainlinks ability to enhance smart contracts and its first mover advantage in this field secured it a lot of real world usage. Currently, because of their nature and needs especially DeFi projects are currently using Chainlinks tech.
You can trade Chainlink on Binance, Coinbase, OKEX, Huobi and various others in multiple pairings. The main exchanges and pairings by mid September 2020 are the following (there was some bug with the Huobi market @ Coingecko when we took this screenshot – it should have been in second place in terms of volume after Binance):
Holder & Community Specialties
The LINK token is a classic utility token which is used in operating the network. Yet Chainlink has some specialties:
The LINK token is used as payment and collateral to maintain the network security and incentives of the overall network. Additionally “staking” in DeFi products or exchanges is available (this isn’t LINKs actual utility). In the future there will be the option to stake LINK to node operators and receive a share of their earnings.
LINK was initially not developed to be a real world payment option but due to the popularity it can be used to pay for services like booking flights, hotels and homes all over the world at Travala.com.
As mentioned in the article, Chainlink has the first mover advantage when it comes to decentralized oracle networks. That gives it an advantage against competitors because it already has claimed huge market share and trust in this field. It also had time to acquire interesting tech like the DECO protocol and built up a very large and active community. Additionaly the team is working very hard to expand the ecosystem at a rapid pace and there are a lot of promissing upcoming events in Chainlinks product and business development. That’s why other projects will have a hard time competing against it. After its huge recent run it’s for sure no small cap “gem” any more, but Chainlink is a very solid and well established project that has a lot going on to make it worth the hype.
*We Simplify Tech’s disclaimer: In this article we express our research results on LTO Network and do not want to give any form of financial advice*