LINK

Chainlink

LINK to USD

Project history

The early insight of Chainlink’s founders was that building the infrastructure of the decentralised web also requires a decentralised mechanism to interact with real world data.

The Chainlink project started in 2014, and it was originally designed to be a centralised system for verifying and providing data. In 2017, the project pivoted to designing a decentralised network that provides real world data to smart contracts on the blockchain. The whitepaper was published in 2017, and USD 32 million was raised through an ICO.

The network launched in May 2019 on the Ethereum blockchain.

Technology

If the trustworthiness of real world data feeds can be ensured, it improves the security of smart contracts as the possibility of incorrect data feeds is a significant vulnerability.

Chainlink aims to provide reliable real world data to smart contracts through creating a decentralised network of data providers. The veracity of the data is ensured by using multiple data providers, data validation, removing outliers, and applying the most appropriate data aggregation method for the data type (median, average, etc).

The nodes providing data feeds are tracked over time for downtime and accuracy, and the reputation of the nodes influences the likelihood of them being selected.

Version 2.0 will introduce staking where nodes that fail to perform or provide incorrect information will lose part or all of their stake. It is proposed that the users of the network will act as arbiters.

Chainlink have been adding additional features such as verifiable random data and improvements such as a scalability solution that allowed for a 10 times increase in network efficiency. Version 2.0 will extend this to include a cross chain interoperability protocol where smart contracts on different blockchains can interact with each other.

Chainlink was initially launched on the Ethereum blockchain but its technology is compatible with any platform. Chainlink is integrated currently with close to 100 blockchains.

Key people

Chainlink founder Sergey Nazarov has been involved in the crypto space from very early on. Due to his apparent purchase of the smartcontact.com domain which preceded the publication of the Bitcoin whitepaper in 2008, some suspect that he was in some way involved with the creation of Bitcoin and “Satoshi Nakamoto”.

He cofounded the Chainlink project with Steve Ellis, and they coauthored the whitepaper with Cornell professor, Ari Juels. With the 2020 acquisition of data security project DECO from Cornell, Ari Juels formally joined Chainlink.

The original for profit company was founded on 1 January 2014, domiciled in the Cayman Islands.

The project has a very significant development budget in the form of treasury tokens.

Supply model/Tokenomics

1 billion Chainlink tokens were minted, and 35 percent of these were sold through their 2017 ICO. 

Another 35 percent of tokens were reserved as incentives for node operators to provide a minimum level of profitability until the user base grows to a point where the nodes are profitable without subsidies.

The remaining 30 percent of the tokens were granted to the project’s treasury for future development of the platform.

The token is used for all payments on the platform. Data node operators earn their fees in LINK tokens. For now, staking LINK tokens may optionally be requested by customers where the staked security deposit can be lost if the data provider fails to deliver.

Version 2.0 of the network will introduce staking for all node operators where a combination of the size of the stake and the node’s track record in terms of accuracy and latency will drive the node’s profitability. LINK token holders will be able to delegate their tokens to be staked by node operators.

Key value drivers

Chainlink’s user growth trends remain very strong. Targeting metaverse projects and enterprise use cases such as supply chain related applications and helping traditional financial institutions engage with DeFi is likely to continue to fuel and accelerate their growth.

As the leader in their market, Chainlink is the primary beneficiary of the growth in blockchain applications and their user bases. Their competitors haven’t been able to make a dent in Chainlink’s overwhelming dominance.

The staking module and the interoperability protocol launching in the near future are likely to catalyse further growth.

Disclaimer: The information in this publication pertaining to Sygnum Bank AG (“Sygnum”) is for general information purposes only, as per date of publication, and should not be considered exhaustive. This publication does not consider the financial situation of any natural or legal person, nor does it provide any tax, legal or investment advice. This publication does not constitute any advice or recommendation, an offer or invitation by or on behalf of Sygnum to purchase or sell any assets. No elements of precontractual or contractual relationship are intended. While the information is believed to be from accurate and reliable sources, Sygnum makes no representation or warranties, expressed or implied, as to the accuracy of the information. Sygnum expressly disclaims any and all liability that may be based on such information, omissions, or errors thereof. Any statements contained in this publication attributed to a third party represent Sygnum‘s interpretation of the data, information and/or opinions provided by that third party either publicly or through a subscription service, and such use and interpretation have not been reviewed by the third party. Sygnum reserves the right to amend or replace the information, in part or entirely, at any time, and without any obligation to notify the recipient of such amendment / replacement or to provide the recipient with access to the information. Simultaneously, there is no obligation of Sygnum to inform recipients of information, if before provided information later becomes outdated, inaccurate or obsolete, unless otherwise provided by applicable law. The information provided is not intended for use by or distributed to any individual or legal entity in any jurisdiction or country where such distribution, publication or use would be contrary to the law or regulatory provisions or in which Sygnum does not hold the necessary registration, approval authorisation or license. Except as otherwise provided by Sygnum, it is not allowed to modify, copy, distribute or reproduce, display, license, or otherwise use any content for commercial purposes.

Contact Sygnum Singapore

I am a
Submit Mandatory fields

Local restrictions – Provision of cross-border services

It looks like you are using a computer with an IP address located outside of Switzerland.
If you are located in Switzerland, please click “Continue” to access the Sygnum Bank AG (Sygnum) website.

If you are not located in Switzerland, please read below.

This website and the information contained herein are addressed solely to persons residing or domiciled in Switzerland.

Sygnum is a regulated bank supervised by the Swiss Market Financial Authority (FINMA). The products and services on this website are authorised in Switzerland. Sygnum cannot promote its products and services in other countries where it is not authorised by the supervisory authority of that country to do so.

If you click on “Continue” to visit this website, you confirm that you have read and understood the above and you are visiting this website on your own initiative without any active promotion or solicitation from Sygnum.

Investor qualification

The following content is available to qualified investors. Please confirm your details below to visit this page, or please see our other digital asset updates here.

Security alert

Stay alert to fraudulent communications. Sygnum will never post messages on social media or private messaging applications regarding e-banking access or logins. If you have concerns, contact us.

Close