The eleventh cryptographic project in terms of market capitalization is on a winning streak. Yesterday, the LINK token exceeded its highest price level, the so-called all-time high (ATH).
Chainlink triumphs! What is behind LINK's increases?
Even though among the majority of cryptocurrencies a downward trend has been apparent recently and only some of them were noting small increases, the LINK token has put itself forward significantly. Some time ago, on the 16th of February, it reached its new price record - 4.83 USD per coin (according to data provided by CoinMarketCap). The threshold was exceeded yesterday, however, when the price of the token reached USD 4.95. Currently, its exchange rate is 4.77 USD.What stiumlated LINK's increases? The increases are a result of the deepening interest in the project. Link token is closely related to the Chainlink platform in terms of usability. Its value remains correlated with the number of operators offering off-chain services for the system.
We will focus now on the cooperations that Chainlink has established this year as it was the cooperations that have pushed LINK towards increases. What is interesting is the fact that, at the beginning of January this project was 16th in the CoinMarketCap ranking in terms of market capitalization. It went up by 5 places in order to get close to the top ten.
The information about the Polkadot network integrating with Chainlink was one of the reason of its success. As an official announcement issued on the 25th of February informs, the project will become the main supplier of decentralized Oracles (the oracles are responsible for providing external data needed to launch a smart contract after reaching certain contractual conditions) for all ground-based blockchains and also for the entire Polkadot network.
It should be underlined that it is the first ecosystem supported by Chainlink that functions outside the Ethereum network. What benefits does this cooperation provide? Polkadot's developers will be able to use decentralized Oracles belonging to Chainlink. Thanks to that they will quickly connect their smart contracts with input and output. It is, therefore, not only a safe solution, but also a prominent one! If they decided to implement their own Oracle, as they explain it themselves, they would have to face the problems associated with it, such as, for instance, additional expenses and delays in work. This is actually the main reason why Chainlink, which provides secure solutions, has been recognized here. Polkadot himself wrote about it as follows:
"Chainlink is quickly becoming the de-facto standard in the Oracle-as-a-Service category and is seeing wide adoption across the blockchain landscape, including several decentralized finance projects and large enterprises, such as Synthetix and Google."
This, in turn, shows us how important a role it can play. It helps platforms acquire high-quality Oracles and provides the right tools to use them in a decentralized as well as configurable framework.
The second good news is related to Ethereum Classic. The cooperation was announced on the 27th of February and its main goal is to introduce decentralized Oracles to Ethereum Classic. It was emphasized in the report that the Oracles connect blockchaines with the outside world by creating bridges.
"Chainlink is a proven decentralized oracle network, which allows Ethereum Classic smart contracts to interact with off-chain resources with the same security guarantees as the underlying blockchain."
- informs the report.
Even a fully decentralized contract will remain uncertain if it is based on data provided by centralized Oracles. Chainlink, on the other hand, introduces decentralization to both the data source and the download process. One of Oracle's use cases is to provide DeFi applications in Ethereum Classic with secure and reliable access to the ETH/USD price through a price reference agreement.
What does characterize Oracles in Chainlink?
The project was created to solve smart contracts' main problem, that is uncertainty about the correctness of data provided by centralized Oracles. It is quite important because smart contracts can be self-executing. If incorrect data, e.g. on share prices, would end up on blockchain, and an intelligent contract was based on such data, the contract could function improperly basing on incorrect information provided to it.
There are two basic types of Oracles: those involving notary data checking and those where information is entered manually by a human. Both of them are flawed. The problems they face can be solved by the decentralized Oracle network belonging to Chainlink!