You can trade Chainlink on MEXC Global, LBank, and Binance. democratic deal pairs for Chainlink in the market includes LINK/USD, LINK/CAD, LINK/EUR, LINK/PHP, LINK/INR, and LINK/IDR .
What is Chainlink?
Chainlink is a model for building Decentralized Oracle Networks ( DONs ) that bring real-world data onto blockchain networks, enabling the creation of hybrid bright contracts. These DONs provide decentralized services such as Price Feeds, Proof of Reserve, Verifiable Randomness, Keepers, and the ability to connect to any web API .
It aims to ensure that the external information ( price, weather data, event outcomes, etc. ) and off-chain computations ( randomness, transaction automation, fair rate, etc. ) fed to on-chain smart contracts are dependable and tamper-proof .
Chainlink prophet networks are blockchain-agnostic and are incentivized through the native LINK token, used for node payments and network collateral .
A brief history of Chainlink
Chainlink is an open-source protocol developed by Chainlink Labs ( once Smart Contract Ltd. ), founded in 2014 by Sergey Nazarov and Steve Ellis .
The Chainlink Network went live on the Ethereum mainnet on June 1st, 2019 and has since expanded to support extra blockchains and layer 2 networks such as Polygon, BSC, Avalanche, Arbitrum, and more .
What is the purpose of Chainlink?
To understand the purpose and function of Chainlink, we will split it into two sections :
- The Chainlink Network
- The Chainlink (LINK) token
The Chainlink Network
Before we dive into the function of the Chainlink Network, we need to understand the basics of smart contracts and how prophet work.
ache contracts are programmatic code ( if x consequence occurs, execute y action ) that operate on a blockchain network. however, ascribable to the security model of blockchain networks, smart contracts are isolated from the external world and can not natively get in touch to off-chain systems .
To overcome this trouble, an extra nibble of infrastructure is required known as an “ oracle ” which relays data from the real earth onto blockchain networks, where it can be consumed by chic contracts .
The Chainlink Network addresses this return through Decentralized Oracle Networks ( DONs ) that dwell of a network of independent oracle node operators that fetch, aggregate, validate, and deliver real-world data on-chain. Each prophet node can specialize in providing different decentralized services on the behalf of smart contracts .
Chainlink DONs back two different ways of delivering off-chain data to on-chain ache contracts. This includes the basic request model and the decentralized data model .
- Basic Request Model: Smart contracts generate and submit a data request to Chainlink oracle nodes in one transaction and receive the response later in time within a separate transaction.
- Decentralized Data Model: A shared data resource where Chainlink oracle nodes regularly update an on-chain reference contract with fresh data, allowing smart contracts to query and receive real-world data in a single transaction.
The decentralized datum model is powered by Chainlink nodes using the Off-Chain Reporting Protocol ( OCR ), where datum is fetched and aggregated off-chain, before a single transaction is submitted on-chain containing each node ’ s signature and corresponding data luff .
The Chainlink Token (LINK)
LINK is an ERC-677 token that is used to incentivize the proper operation of Chainlink DONs. The nominal has besides been bridged across multiple blockchains to enable native Chainlink oracle integrations .
The LINK nominal is used within the Chainlink Network for the pursue components :
- Node Operators Fees: Smart contracts are required to pay Chainlink nodes using LINK tokens to obtain access to real-world data and other oracle services.
- Implicit Staking: The current and future revenue of Chainlink nodes are denominated in LINK tokens, incentivizing the proper operation of the Chainlink Network.
- Explicit Staking: Chainlink nodes in the future can be required to lock up LINK tokens as collateral to back their oracle services, which can be slashed for malicious behavior.
Who uses Chainlink?
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The Chainlink Network is used by smart contract applications that require access to real-world data and off-chain computations. The net is besides used by data providers to monetize their datasets by selling their apis to smart contract applications .
The most common use encase includes securing Decentralized Finance ( DeFi ) protocols which require fiscal market data. The Chainlink Network offers a diverseness of on-chain data feeds that are used to secure tens of billions of dollars. Integrated applications include Aave, Compound, Synthetix, and more .