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Chainlink

Last Updated: April 20, 2022

Chainlink was created in 2017 and launched in 2019 amid a surge of interest in cryptocurrency and a proliferation of startups hitting the scene.

With Chainlink, developers architected a real-time data feed for smart contracts operating on blockchain networks. Chainlink incentivizes data providers, or oracles, that are rewarded for bridging smart contracts with external data sources. Today, Chainlink oracles support smart contracts on any blockchain.

Background

Chainlink was created in June 2017 by a startup, SmartContract, co-founded by Steve Ellis and Sergey Nazarov. After deploying the protocol, the company held an initial coin offering (ICO), selling 35% out of a total 1 billion LINK tokens to raise $32 million USD at equivalent market rates. The remaining LINK tokens were distributed with 30% allocated to SmartContract towards blockchain development, and 35% to reward node operators.

History

2017

Chainlink is created

2019

Chainlink Network launched

2021

Offchain Reporting integrated with Mainnet

2021

On-chain Verifiable Randomness Function launched

What is Chainlink’s place in the ecosystem?

Scalability

Chainlink’s scalability hinges on the platform’s ability to process data across oracles. Chainlink features off-chain reporting, boosting the efficiency of data processing across the oracle network. This feature allows Chainlink to provide a greater magnitude of real-world data directly to smart contracts, so innovators may better architect Web3 software applications.

Speed

As a decentralized network meant to interface with a wide range of smart contracts on different blockchains, transaction speed will vary based on interfacing blockchains, the consensus mechanism, and other network factors.

Security

While a blockchain interfacing with Chainlink features its own cryptographic security measures, Chainlink divides execution into three distinct steps — facilitating communication between users and external data providers.

Step 1: Users draft a service level agreement to designate an oracle data provider based on a set of user-defined specifications.

Step 2: Oracles access and process external real-world data to be sent back to contracts on the Chainlink blockchain.

Step 3: Results are tallied and returned to an aggregation contract that assesses the validity of each response, returning a weighted score to users.

Governance

Chainlink’s governance architecture features three types of smart contracts to facilitate data flow.

Aggregating contracts take information from approved oracles and connect them to smart contracts requesting matching data sets.

An order-matching contract identifies ideal oracles using a smart contract’s SLA as the criteria.

A reputation contract computes the trustworthiness of an oracle using historic records such as staked LINK tokens, average response time, and completed requests.

Chainlink also has nodes to manage data that originates from an independently responsible oracle outside the blockchain.

Popularity

Chainlink built a wide network of partnerships as a blockchain agnostic oraclized data solution featuring a decentralized network, including AAVE, Compound, SYNTHETIX, PAXOS, celsius, Nexus Mutual, and ENS.

Community

The Chainlink community is highly engaged in building flexible, smart contract infrastructures for a growing ecosystem of blockchain networks. Chainlink provides a number of tutorials, guides, and videos and hosts physical and virtual events designed to educate and onboard newcomers.

Resources

Website

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