What is Chainlink?

Chainlink is a fully decentralised oracle network powered by the LINK cryptocurrency. One of the first networks to allow the integration of off-chain data into smart contracts, Chainlink enables smart contracts to send payments to bank accounts and other payment networks. It also connects smart contracts to the data sources and APIs they need to function easily. Its ecosystem currently powers 1,000 project integrations with 700 oracle networks, giving access to over 1B data points and securing over US$75 billion in value for DeFi applications like Synthetix, Aave, and Compound, among others.

A brief history of Chainlink

Sergey Nazarov, the co-founder and CEO of Chainlink, founded the oracle network project in 2017, alongside Steve Ellis. Chainlink launched an Initial Coin Offering of the LINK token’s total supply during that year. While Chainlink is primarily an oracle network and not a blockchain per se, the project’s leaders plan to launch staking for LINK holders in 2022 as a way to secure the network and incentivise the token’s holders.

In April 2021, the network published a second white paper detailing plans to expand its suite of services to off-chain computation of data, emphasising its focus on facilitating hybrid smart contracts.

How Chainlink works

Chainlink operates a decentralised oracle network that allows blockchains to securely interact with external data feeds, events, and payment methods. It is supported by a wide range of open-source stakeholders such as data providers, node operators, smart contract developers, researchers, security auditors, and more.

What is Chainlink used for?

The LINK cryptocurrency powers the Chainlink network by incentivising users who ensure the proper operation of this network. The token is also used across multiple blockchains, enabling integrations with native Chainlink oracles. Within this network, LINK is used for staking and payments to node operators.