Disclaimer: The datasets shared in the following article have been compiled from a set of online resources and do not reflect AMBCrypto’s own research on the subject.
Chainlink is a decentralized oracle network that allows smart contracts on blockchain platforms like Ethereum to securely access off-chain data and resources.The Chainlink network is made up of several components, including Chainlink nodes, which are responsible for retrieving data from external sources and providing it to the smart contract, and Chainlink oracles, which are responsible for verifying the authenticity of the data provided by the nodes.
The Chainlink network uses a consensus mechanism to ensure the accuracy and reliability of the data provided by the nodes. Chainlink is widely used in decentralized finance (DeFi) applications and it provides a wide range of services such as price feeds, randomness, and identity verification. It is also used in the gaming and prediction market, supply chain management and many other industries.
The value of LINK is largely determined by the use cases of the decentralized oracle network. The more nodes that secure the network, the higher the demand for LINK tokens. With a maximum supply of 1 billion tokens, the token has shown tremendous growth since its launch in 2017. It rose from an average of $0.50 to its all-time high of $52.88 on May 10, 2021. Present-day circumstances are different, however.
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In late 2020, LINK’s price noted a significant bull run, hitting an all-time high of over $20 in December of that year. This was driven in part by the overall bull market in the cryptocurrency space, as well as a strong demand for LINK as a utility token on the Chainlink network. Since then, the price of LINK has come down somewhat, but it has remained relatively stable and continues to be a popular investment asset.
One reason for LINK’s relatively strong performance may be its strong adoption in the cryptocurrency space. The Chainlink network has gained significant traction among developers and users, and it has a number of high-profile partnerships and collaborations. Additionally, LINK has a strong development team and is backed by a number of well-respected investors, which adds to its credibility and appeal.
On 10 November, Chainlink started offering proof of reserve services for troubled crypto exchanges. This feature was launched back in 2020 but has started to gain popularity in the wake of the current unrest in the industry.
Apart from the staking upgrade, Chainlink announced various partnerships over the last week that will increase its adoption. The company announced on 24 October that prices in the Bitizen wallet will be powered by Chainlink price feeds following its integration into Polygon mainnet.
Chainlink also revealed a channel partnership with Tokenomia.pro, a web3 consultancy firm catering to token engineering and smart contract design, among other things.
Chainlink also announced a partnership with international banking network SWIFT, which came as much-needed positive news for its stakeholders.
Speaking at SmartCon22, Chainlink Co-founder Sergey Nazarov unveiled plans to launch staking at the end of 2022, in addition to a new economic model for the Web3 services platform.
On 29 September, SWIFT, the international banking network, announced a collaboration with Chainlink in order to develop a cross-chain interoperability protocol (CCIP) in an initial proof-of-concept (PoC). This move will pave the way for the institutional adoption of Distributed Ledger Technology (DLT).
According to Chainlink’s official website, the transaction value enabled by the network so far is a whopping $7.2 trillion.
Back in 2014, SmartContract.com set out to develop a bridge between external data sources and public blockchains. Ironically, this led to the creation of a centralized oracle system called Chainlink. In 2017, this product was reshaped into what we now know as the Chainlink Network.
Chainlink is the largest oracle project in terms of market cap and total value secured, and a number of crypto-projects associated with it. An oracle is basically software that acts as an intermediary between the on-chain and the real world.
Moreover, Chainlink provides a lot of use cases. Users of Chainlink can operate nodes and make money by managing the blockchain’s infrastructure. The Price Feed Oracle Networks are powered by a number of node operators. The platform integrates more than 100 projects with 700 Oracle networks, giving it access to over a billion data points and protecting over $75 billion.
Source: Chainlink
So, what does this movement mean, and is now a good time to get into LINK? This article will talk about the altcoin ranked twenty-fourth by market capitalization. In fact, it will also touch upon what are the key factors to consider when making a decision on buying into LINK.
Here’s a fun fact from Defi Llama – Chainlink is securing more value than all of its competitors combined. The network has secured more than $14 billion from protocols that rely on its data feeds.
In May 2021, Sergey Nazarov, Co-founder, and CEO of Chainlink disclosed in a podcast that Chainlink is estimated to have 60% of the market share.
A monopoly like this has its cons. For instance, during the Terra collapse, Chainlink caused an $11.2 million loss to the Venus protocol. This was when the latter was unable to access accurate data from Chainlink’s price feed.
In fact, the Chainlink ecosystem boasts some big names like VISA, SWIFT, Google Cloud, etc.
It’s important to note that most of the LINK in circulation is being used for speculation rather than rewarding node operators. This, as expected, raises eyebrows among value investors.
Some believe that Chainlink is creating economic value in the industry by catering to a number of crypto-projects. Alas, that value doesn’t seem to reflect on their native token’s price.
Even so, following Chainlink’s 7 June proposal of the staking update, LINK surged by nearly 20% from $7 all the way up to $9.
The proposed staking update is much anticipated in the crypto space. The update will be beneficial for the token’s value as oracles will be required to stake LINK. This update will also enable community participation, leading to enhanced overall security.
Nazarov clarified that Chainlink does not produce blocks, but “make consensus on hundreds of oracle networks about price data.” He further added that the developer’s team is finally satisfied with the security and scalability of the consensus mechanism and ready to launch staking this year.
The update will also bring additional utility to LINK, beyond facilitating payments to node operators.
Chainlink developers estimate that the proposed staking will yield 5% annually thanks to proceeds from Chainlink’s data feed users and emissions from the treasury reserve. The goal is for treasury emissions to end once Chainlink’s usage grows, leaving all staking rewards to come from fees paid by oracle users.
While speaking at NFT.NYC 2022, Lauren Halstead from Chainlink Labs outlined the spectrum of Chainlink’s use cases using the example of dynamic NFTs. Halstead demonstrated how dynamic NFTs can be updated in real-time with the help of off-chain data gathered by Chainlink.
Interest Protocol, the first fractional reserve banking protocol on the Ethereum blockchain, announced earlier this month that it had entered into a strategic partnership with Chainlink. Chainlink will help Interest Protocol integrate two of its features, namely Chainlink Keepers and Chainlink Proof of Reserve.
On 15 August, Floki Inu announced that they had integrated two products from Chainlink’s suite with their newly launched FlokiFi Locker on BNB Chain and the Ethereum mainnet. In an interview with BSC news, a core team member of Floki said,
“We feel excited to be working with Chainlink to enhance the integrity of the FlokiFi Locker protocol. Chainlink is by far the biggest decentralized oracle solution in the world as well as the best and most reliable.”
On 28 August, Chainlink informed its community on Reddit that the Chainlink Verifiable Random Function (VRF) was being used by more than 350 projects across Avalanche, Ethereum, Fantom, and Polygon, as a source of provably fair randomness for their NFTS, dApps etc. Chainlink VRF is the industry-leading random number generator (RNG) solution for an off-chain solution and smart contracts.
Data from whalestats revealed that LINK is the most widely held token among top Ethereum whales. This information is derived from the data collected from the wallets of the top 5000 Ethereum whales.
According to a report published by Fortune Business Insights, the global Internet of Things (IoT) market is projected to grow at a CAGR of 26.4% annually between 2022 and 2029. Given the rising adoption of blockchain technology in mainstream businesses like banking, logistics ets, we can expect a similar growth rate in cryptocurrencies that enhance IoT-based businesses. Chainlink would be an appropriate example of this.
LINK Price Analysis
According to data from CoinMarketCap, LINK was trading at $6.442 at press time, down almost 5% since the beginning of the month. The token’s market capitalization of $3.1 billion makes it the 19th largest cryptocurrency in the world. Over $151 million worth of LINK had changed hands over the past 24 hours, at press time.
Source: LINK/USD, TradingView
The month of August 2022 saw Chainlink closing in on double-digit territory when it set a two-month high of $9.52, before falling to prices that rendered the monthly return negative. This is pretty volatile, compared to the rather calm sideways movement witnessed by LINK’s price in July.
Even with all the volatility, the overall theme for August can be summed up with one word: Bearish.
September, however, was bullish, with October seeing bits of both. As far as November and December are concerned, the less said, the better.
While 2023 began on a positive note, its fortunes were reversed in mid-February. LINK’s most recent downtrend has been fueled by the macroeconomic headwinds faced by the crypto-market at large. It has recovered since, however, and this has been fueled by how ETH and BTC have been doing.
Chainlink’s critics
Eric Wall from Arcane Assets has been rather critical of Chainlink’s activities. In May 2021, he stated that the network is not “crypto-economically secure,” citing the developer’s state and the fact that the model relies on a trusted system.
Zeus Capital has been a vocal critic of Chainlink since 2020 when they published a fifty-nine-page investigative report. One outlining how the network is a fraud, going as far as calling it the “wirecard of crypto.”
CryptoWhale turned up the heat on Chainlink developers in a series of tweets too. It accused the team of running a pump-and-dump scheme. These allegations came following a $1.5 billion LINK sell-off allegedly by Chainlink insiders and developers in June 2021.
LINK Tokenomics
One billion LINK tokens were pre-mined in 2017, following which Chainlink raised $32 million through an initial coin offering (ICO). Thirty percent went to the founders and the project. Thirty-five percent accounted for airdrops and rewards for node operators. The remaining thirty-five percent went towards issuing to investors.
According to Etherscan, the top hundred wallets hold roughly 75% of LINK supply. This doesn’t look so good for a token that’s supposed to be decentralized. Chainlink’s supporters have, however, argued that a certain degree of centralization will help developers to effectively respond to network-threatening events.
Data from Etherscan also revealed Chainlink developers’ addresses consistently dumping their holdings on Binance, something that hasn’t been received well by the community.
One would think that this works out well in favor of decentralization, but most of those tokens have been bought up by whales.
A number of analysts believe that the performance of LINK and ETH is correlated to some extent.
Chainlink’s growth is inherently tied to the growth of smart contracts and blockchain services. Increased adoption of smart contracts translates to an increase in demand for data feeds from oracles.
Chainlink’s utility has attracted cross-chain ventures. Non-Ethereum-based protocols like Polkadot and Solana are building integrations with Chainlink for access to its oracle network.
Chainlink (LINK) Price Prediction 2025
Experts at Changelly concluded from their analysis of LINK’s previous price action that in 2025, the crypto should be worth at least $26.64. The maximum price for LINK, according to them, would be $32.01. Considering its press time price, that would yield a whopping 312% profit.
On the contrary, Finder’s panel of experts has projected a median value of $40 for LINK by December 2025.
Ethereum merging its mainnet and Beacon Chain is expected to affect LINK’s price action, too. In fact, it has also been demonstrated that there’s some correlation between ETH and LINK. ETH rose above $4000 and LINK broke the $50-mark to reach its all-time high last year.
Talking in the context of the Mainnet merge, if ETH should break the $ 10,000 level, then it is likely that LINK will follow suit and touch $100.
In light of new business partnerships, API connection improvements, and Chainlink’s customized services, there are also projections that place a maximum price of $45.75 on LINK by 2025.
Read Chainlink’s (LINK) Price Prediction 2023-24
Chainlink (LINK) Price Prediction 2030
Changelly’s crypto experts have estimated that in 2030, LINK will be trading for at least $182.88, possibly peaking out at $221.4. That would mean a return of 2650%.
Joseph Raczynski, the technologist, and futurist at Thomson Reuters and one of the panelists for Finder, has a rather positive outlook on LINK’s future. He sees the coin worth $100 in 2025 and $500 by 2030.
“Link is pushing the boundary on one of the most important aspects of blockchain technology — connections to other blockchains, databases and ecosystems. Chainlink could be the highway among blockchains, which is a huge key for the industry.”
Justin Chuh, the Senior Trader at Wave Financial, made his own projections for the future of LINK too. He sees the coin at $50 in 2025 and $100 in 2030.
Forrest Przybysz, the Senior Cryptocurrency Investment Analyst at Token Metrics, shared his immensely bullish stance on the token’s future value and projected LINK to be worth $500 by 2025 and $2500 by the end of 2030.
He added,
“LINK has one of the fastest, smoothest growth curves of any cryptocurrency and has a major lead in terms of its competition.”
Conclusion
Chainlink had previously clarified that it would continue operating on the Ethereum blockchain following the Merge to the proof-of-stake (PoS) consensus layer scheduled for next month, rubbishing claims of any association with forked versions of the Ethereum blockchain, including proof-of-work forks.
The major factors that will influence LINK’s price in the coming years are,
- Timely implementation of Staking update
- Increased Adoption of WEB 3.0
- Partnerships with established businesses.
Launched in 2017, Chainlink is fairly new to the industry and its full potential is yet to be determined. On-chain metrics suggest that users are confident about the future of LINK.
While it is true that the service provided by Chainlink pertains to a specific niche, one cannot deny the relevance of said niche and its importance in the future. Oracles essentially cater to all blockchains that utilize smart contracts, making the services of platforms like Chainlink vital for their operations. Companies from both traditional backgrounds and from the crypto space agree that smart contracts hold considerable significance, significance that will only grow in the future.
From an investment point of view, one might compare Chainlink and its token to how a traditional company and its shares function. If the company has a healthy balance sheet and has a meaningful contribution to the economy, then its shares are bound to perform well. The same can be said for Chainlink, because they are the leaders of their sector and their services are essential to several projects, both now and in the future.
The above analogy would not hold true for even a third of the thousands of crypto projects that exist today.
As far as the Fear and Greed Index is concerned, it flashed signs of ‘Neutral.’
Source: CFGI.io
