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What is Chainlink (LINK)? Everything you need to know about LINK Token

What is Chainlink? What is LINK Token? Let's find out the outstanding features of Chainlink and detailed information about LINK Token!

lochoang

Published Jul 07 2019

Updated Jun 08 2023

5 min read

Founded in 2017, Chainlink was one of many projects working to decentralize the blockchain industry. Many have been able to deliver on their initial goals and grow market activity as well, but so far only Chainlink has expanded beyond Ethereum onto even more blockchains.

In today's article, I will provide every piece of information you need about the Chainlink project and LINK token.

What is Chainlink?

Chainlink is a decentralized oracle network that provides reliable real-world data for smart contracts across countless blockchains and applications in the cryptocurrency world. The network allows smart contracts to receive accurate data from external sources such as any kind of API or external data feeds.

The project brings the capabilities of smart contracts to the next level by allowing access to off-chain data while still maintaining the security and reliability that are inherent to blockchain technology. Originating from Ethereum (ETH), Chainlink has been expanded to work on every blockchain that has smart contracts.

To ensure better experience for users, Chainlink is interoperable and runs on various blockchains instead of operating on its own blockchain.

How does Chainlink work?

The main objective of Chainlink is to bridge on-chain and off-chain ecosystems. In order to improve communication between smart contracts and blockchains, Chainlink follows a three-step process:

Oracle Selection: When a service user drafts an SLA (Service Level Agreement) specifying data requirements, the Chainlink software uses it to match them with appropriate oracles. To complete this process, they must deposit LINK in an order-matching contract that accepts bids from oracle providers.
Data Reporting: This is the step where the oracles connect with the external data sources from the real-world which is requested in the SLA. The data will be processed by Chainlink’s oracles then sent back to the contracts.
Result Aggregation: The final step of the process is to tally the results of all input data collected by oracles and return it back in a weighted score, using the sum of all the data received.

Also, Chainlink includes off-chain oracle nodes which are connected to the Ethereum network. The off-chain nodes collect data from off-chain resources as requested by users then process that data through Chainlink Core to transmit to on-chain oracles.

What makes Chainlink unique?

What makes Chainlink powerful is how it connects Chainlink to validate data from multiple data sources. The internal reputation system of Chainlink can provide data at a high accuracy level despite the fact that Chainlink is a third-party oracle project.

To achieve this, Chainlink’s off-chain architecture connects all nodes together and each node is also linked to a reserved API to ensure every operated contract on Chainlink is responded.

Another interesting fact about the project is the Chainlink Aggregating Contract can validate data from a single source and also multiple sources as it can reconcile all the data together.

What is LINK Token?

LINK is an ERC-20 token with additional ERC-223 functionality. The token is used in the Chainlink network to operate Chainlink nodes to retrieve data from external data sources. The value and demand of Chainlink tokens are heavily dependent on the total number of operators that run on the network.

The main use cases of Chain Link Token are:

Paying node operators.
Incentivizing uptime guarantees which is done through the payment penalty or collateral system.

Detailed information about LINK token

LINK Token Allocation

LINK Token Sale

After releasing a white paper in September 2017, the Chainlink team held an initial coin offering (ICO) that raised $32 million. They sold 35% of their total LINK token supply during this token sale event.

How to buy LINK

You can use Coin98 Exchange to swap other tokens for LINK following these simple steps on: https://exchange.coin98.com

Step 1: Connect Coin98 Extension Wallet.

Step 2: Select Uniswap.

Step 3: Choose coins/tokens for trading:

Search LINK.
If the result does not come up, you can paste the contract of LINK into the search box: 0xbb4CdB9CBd36B01bD1cBaEBF2De08d9173bc095c

Step 4: Adjust the amount you want to swap.

Step 5: Adjust the gas fee, then click Approve.

Alternatively, you can apply the same steps for Coin98 Wallet to swap other tokens for LINK

How to mine LINK

Users get rewarded for running nodes on the Chainlink Network.

Otherwise, you can buy LINK on listed exchanges such as Binance, Kucoin, FTX...

How to store LINK

You can store LINK token on Coin98 Wallet with these below steps:

Step 1: Open Coin98 Wallet & click Receive on the home screen.

Step 2: Search LINK Token.

Step 3: Click on the correct result.

Step 4: Copy the wallet address and send LINK to this address.

Roadmaps and Updates

After the Smart Contract Summit #1, Sergey Nazarov as the founder of Chainlink, announced a few key points from the development of Chainlink:

Cross-chain Interoperability Protocol (CCIP): a new open-source standard to improve how smart contracts will interoperate across blockchains and enable cross-chain commands.
Chainlink Keepers: The mainnet of Chainlink Keepers will remove manual processes, increase dApp use cases to shift more resources to the core development.

Team, Investors, and Partners

Team

The idea of Chainlink grew when Steve Ellis and Sergey Nazarov became interested in the decentralized web. They created a white paper with their advisor, Ari Juels, which was published September 2017.

Sergey Nazarov - CEO: Sergey Nazarov is a 32 years old tech entrepreneur who founded SmartContract.com in 2017, which allowed him to create the blockchain startup Chainlink two years later.
Steve Ellis - CTO: Steve Ellis is the Co-Founder of Chainlink and CTO at SmartContract.com. He has worked on securing sensitive HIPAA compliant data and building scalable payments automation software for Pivotal Labs before working with smart contracts.

Investors

Chainlink is funded by 7 investors. The most recent ones are Fundamental Labs and Andreas Schwartz.

Partners

According to Coin98 Analytics on April 3rd, 2021, Chainlink has partnered with over 478 projects. The oracle solution that Chainlink provides is widely used in the cryptocurrency industry. With the recent market surges, Chainlink is expected to partner with more projects in the future.

Is LINK a good investment?

This article has provided some of the main ideas related to the LINK token and its implications. Still, it is important to note that there are a few key points that investors should take into account before making investment decisions:

Chainlink is number 1 in the oracle category and irreplaceable. The project has gained a lot of success during the development of the blockchain technology. The project is unique and provides a powerful tool for developers and businesses to receive high-accuracy data from off-chain sources. But with more oracle projects released nowadays, will Chainlink hold its top-tier oracle project position?
Chainlink is a third-party oracle project which sometimes limits itself from developing its ecosystem. However, is operating on its own blockchain as an oracle project necessary?
The team behind Chainlink is known for their previous experiences in smart contracts. With more decentralized apps coming out, the demand for services on smart contracts are high. Their experience is valuable and can definitely help to solve current and upcoming issues.

Conclusion

I hope you have gained all of the important information about LINK including its features and highlights throughout this topic.

If you have any questions about LINK or want to know more about LINK, please feel free to leave a comment below and join Coin98 Community for further discussions about Crypto.