LINK (Chainlink) Explained:

Chainlink was founded in 2017 by co-founders Sergey Nazarov, and Steve Ellis, and the LINK token went live in November of 2017 after an initial coin offering

Chainlink (LINK) is a decentralized oracle network (DON) that provides off-chain data to on-chain smart contracts. It was founded in 2017 by Sergey Nazarov and Steve Ellis. The LINK token went live in November of 2017 after an initial coin offering (ICO) that raised $32 million.

Oracles are used to integrate off-chain data such as stock prices, weather, or sales statistics on-chain. Oracle providers like Chainlink enable developers to build decentralized applications (dApps) that rely on access to real-world data, on any blockchain.

Chainlink runs a network of decentralized data oracles that tap into the world’s highest quality data feeds. Many smart contracts require real world data to execute commands, however most of the data is stored in off-chain servers. Oracles are used to communicate that data to the dApps, allowing for smart contracts to function and execute commands based on off-chain data.

With a singular oracle solution, there is one centralized point of failure, and manipulation of that oracle could lead to the collapse of the dApp. Chainlink on the other hand, is a network of oracles, thus making the data transmission decentralized.

The decentralized network of oracles makes information transmission from off-chain databases to smart contracts more secure and reliable than a centralized oracle.

As blockchain technology and smart contract adoption continues to grow, oracle network services are becoming increasingly necessary. Chainlink is already integrated with some of the largest projects in DeFi such as Aave and Maker, as well as traditional companies such as the NBA and T-Mobile.

Like other cryptocurrencies LINK is subject to high volatility based on market conditions, and the market’s interpretation of Chainlink. Chainlink also faces competition from other oracle providers. Competitors such as Band Protocol, and Pyth Network also offer decentralized oracle solutions to protocols, and it is possible that a competitor usurps Chainlink.

Chainlink is necessary for smart contracts to be able to interact with real-world and off-chain data. The interaction between real world data and smart contracts allows for blockchain technology to improve existing off-chain systems.

Chainlinks decentralized nature ensures that no one oracle or node is a single point of failure. LINK is also entirely open-sourced, which allows independent developers and security firms to verify Chainlink’s code, or offer help developing the network.