Chainlink is the leading decentralized oracle network, used by leading blockchain networks and dApps to access real-world, off-chain data in a tamper-proof and secure manner on-chain. The Chainlink network leverages a proof of stake consensus mechanism, with validators required to stake LINK - the native digital asset of the ecosystem, to participate in the activities within the ecosystem.

LINK is an ERC-20 token built on the Ethereum blockchain and functions as the utility token within Chainlink. Validator nodes stake LINK and earn rewards for providing accurate data in LINK.

Chainlinks decentralized oracles are the force behind leading dApps in the blockchain industry, from DeFi and gaming to enterprise and NFTs. The Chainlink DON (decentralized oracle network) uses smart contracts to pull reliable, timely, accurate, and tamper-proof real-world data and process it for access to resources on a blockchain ecosystem.

The meteoric rise of decentralized finance can be attributed as one of the key drivers of growth in Chainlinks popularity and usage. Leading DeFi apps use its DON to gain access to accurate, real-world data, especially related to pricing.- essential to their functioning and success.

As more innovation takes place in dApps and blockchain-based applications, the need for decentralized oracle technology such as Chainlink is expected to take off higher, making LINK a formidable cryptocurrency investment. As of May 2022, Chainlink ranks among the top 30 cryptocurrencies by market cap.

You can learn more about ChainLink(LINK) at our BYDFi Blog.

Chainlink's decentralized network consists of several nodes or oracles that work to pull real-world data from off-chain resources and use smart contracts to convert this data into a format that can be accessed by applications running on the blockchain. The use of smart contracts ensures that the data supplied by these oracles remains as trustworthy as possible.

As we know, dApps run on smart contracts. These smart contracts require access to real-world data for functioning but are unable to directly communicate with off-chain sources for this data. This is where a decentralized oracle network like Chainlink comes in.

The smart contracts of the dApps can communicate with the Chainlink network, requesting data which its oracles then proceed to provide. The Chainlink nodes can bid to handle the data requests and the winning oracle will be tasked with supplying the requisite data, earning rewards in the form of LINK cryptocurrency for its effort. The data is then sourced from a data provider on the Chainlink network and after validation by a node, is supplied to the dApp via smart contracts.

dApps that require data through Chainlink pay for this service using LINK tokens, a portion of which is given to the data providers and the nodes as a reward for their efforts. The prices charged for the services are decided upon by the network of nodes within the Chainlink ecosystem based on market conditions and other factors.

The rewards work as incentives to encourage accurate reporting from external data sources and the correct functioning of nodes within the Chainlink network. They also make the smart contract network more resilient and reliable overall.

Chainlink was created in 2017 as an abstraction layer for blockchain, providing support for universally connected smart contracts. Its mainnet launch took place in May 2019, enabling blockchains and blockchain-based applications to access off-chain data.

One of the initial services offered by Chainlink was Price Feeds, which provided off-chain financial data for DeFi applications on various blockchain networks. The development team later introduced additional products, including:

• VRF - a verifiable and tamperproof random number generator for blockchain-based games and NFT projects.
• Keepers - a decentralized and affordable solution for automating smart contracts.
• Proof-of-Reserve - autonomous and trustworthy audits of both on-chain and off-chain resources.
• Cross-chain communication - an open-source standard that allows developers to build applications that can communicate across multiple blockchains securely.

In April 2021, Chainlink released the updated white paper for Chainlink 2.0, which proposed more use cases for the blockchain agnostic DON. One of the significant developments in this white paper was the off-chain reporting feature, reducing oracle update gas fees by up to 90% in the Chainlink ecosystem.

Chainlink has been one of the strong performers among digital assets over the past several years, posting a positive ROI in 2017, 2019, 2020, and 2021. The growth of the DeFi market through 2020 and 2021 also made it one of the best performing cryptocurrencies in 2021, with the LINK price registering new all-time highs multiple times.

Looking ahead, Chainlink and its decentralized oracle network are poised for greater adoption amid the continued expansion of the DeFi and NFT markets. Chainlink's oracles have numerous applications across sectors and can play a vital role in driving up commercial adoption of blockchain technology and blockchain-based dApps. A higher adoption of its technology can send the LINK price and market cap higher and make Chainlink even more valuable to invest in.

As Web 3.0 goes mainstream, more applications would look for services like what Chainlink offers to tap into a wider range of real-world, off-chain data. This, in turn, could drive up Chainlink's value as an investment and support the LINK crypto price.

Chainlinks LINK token is a highly versatile cryptocurrency with several key uses, including:

Currency for Transactions in Chainlink Ecosystem

LINKs primary use is to pay for transactions between smart contracts and Chainlinks node operators. dApps that require Chainlinks services to access off-chain data pay their fees in LINK crypto.

Staking by Node Operators

While nodes can run without any LINK contributions, a node can participate in requests for data that require a deposit only after they have earned some LINK to start with. Within the Chainlink ecosystem, data requesters can specify that node operators deposit a certain number of LINK tokens as penalty fees which will be forfeited if the nodes dont provide accurate off-chain data.

Trade Against Other Digital Assets

The LINK token is one of the most popularly traded and liquid digital assets in the crypto market. You can buy, hold or sell Chainlink against other cryptocurrencies, stablecoins, and even fiat currencies as you trade to grow your portfolio. We recommend that you check the latest Chainlink price, market cap, 24-hour trading volume and perform fundamental and technical analysis before trading LINK.

Lend Liquidity in LINK

BYDFi lets LINK holders generate passive income and grow their investment. Head to our Crypto Lending section and look for LINK from the list of cryptos. Enter the amount of crypto you wish to lend as liquidity to our platform, select the number of days - choose from 7 days, 14 days, and 28 days.

Assess the daily interest rate on offer and verify the estimated profit you can earn. You can then confirm the transaction and lock up your LINK tokens to earn attractive interest.

Ethereum is the largest blockchain ecosystem to support decentralized applications using smart contract functionality. On the other hand, Chainlink is designed primarily as an infrastructure to provide these decentralized applications access to external data sources in a tamper-proof, blockchain agnostic, and secure manner.

Here are some of the key differences between Chainlink and Ethereum:

Ethereum Blockchain vs. Chainlink Platform

Ethereum is a Layer 1 blockchain that hosts decentralized apps. It supports smart contracts and has ETH as its native digital asset or cryptocurrency.

Chainlink is a platform that can support communication between different smart contracts and can supply real-world data to smart contracts in a format they can understand and use. Chainlink has limited functionalities in comparison with Ethereum. The Chainlink ecosystem is powered by LINK which serves as its native digital asset.

ETH Coin vs. LINK Token

Ethereums ETH or Ether is a cryptocurrency or a coin that is minted, as the blockchain leverages a proof of work consensus mechanism. As of May 2022, Ethereum has not yet migrated to the proof of stake consensus algorithm.

Meanwhile, LINK is an ERC-20 token designed on the Ethereum blockchain. Forming a part of a PoS network, the LINK crypto cannot be mined but has to be staked or traded if you wish to obtain it.

ETH vs. LINK Market Cap Difference

Ethereum is the worlds second-largest cryptocurrency by market cap and enjoys extremely high trading volume, liquidity, and demand among investors worldwide. Chainlink has a far smaller market cap, although it is among the top 30 cryptocurrencies in terms of size and popularity.

The Chainlink decentralized oracle network plays a crucial role in supporting the global DeFi ecosystem through its price feeds. Chainlink's oracles enable leading DeFi applications to access secure, tamper-proof, reliable, and timely pricing updates without any downtime or corruption.

As of 2022, Chainlink's Decentralized Oracle Network (DON) is the most widely used oracle service in the DeFi industry, giving it a competitive advantage. Apart from Price Feeds, Chainlink also offers other essential services for the DeFi market, including Proof of Reserve, Keepers, Verifiable Randomness Function (VRF), and Cross-chain Interoperability.

Chainlink allows DeFi protocols to receive off-chain, real-world data and computation. With the introduction of Chainlink 2.0, the platform aims to enhance scalability and capability by supporting multi-chain DeFi environments.