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The native token LINK of blockchain oracle network Chainlink has been on a 14-month decline that has been made worse by the 2022 cryptocurrency bear market.
The token has dropped more than 86% from its peak after reaching an all-time high of more than $52 in May 2021, and as of 2 August 2022, it is trading close to the $7 level.
The devoted followers of Chainlink, referred to as “LINK marines” on Twitter, will be hopeful that the implementation of staking on Chainlink would jump-start the data-providing network’s upcoming phase of growth.
Let’s explore Chainlink and its native token LINK in in detail. Important network upgrades and forecasts for Chainlink’s price through 2022 are also included.
Using inputs and outputs from the real world, Chainlink is a network of decentralised oracles or data providers that relay information to allow smart contracts to run.
In 2017, Steve Ellis and Sergey Nazarov established the network. In the market for blockchain oracles, it has established itself as the industry leader.
In April 2021, around three years after releasing its initial white paper, the network modified it for Chainlink 2.0 in order to propel its next stage of growth.
Oracle networks will complement and strengthen both new and existing blockchains by offering quick, dependable, and confidentiality-preserving global connectivity and processing for hybrid smart contracts, according to Chainlink.
The Oracle Network would concentrate on developing numerous decentralised oracle networks (DONs), which are made up of a number of nodes, according to the Chainlink 2.0 white paper (computing devices).
DONs function to “enforce valid oracle reports and adjudicate off-chain oracle disputes” as well as “move data bidirectionally to and from current blockchains.” DONs enable Chainlink nodes to build unique oracle networks that support smart contracts on a main chain or a destination blockchain.
According to Chainlink, “DONs are formed by committees of oracle nodes that cooperate to carry out a specific task or choose to develop a long-lived relationship to provide persistent services to customers.”
The Associated Press for news, AccuWeather for weather information, Swisscom for telecommunications, and Amazon Web Services and Google Cloud Platform for cloud services have already built Oracle nodes on Chainlink.
In June 2022, Chainlink released the roadmap for the LINK staking mechanism. Staking of LINK is anticipated to begin later this year with the initial v0.1 release, according to a press statement.
According to Chainlink, “staking offers another potent incentive and penalty mechanism for Chainlink nodes to regularly produce correct oracle reports and deliver them to designated destinations in a timely way.”
With the introduction of the “reputation framework and staker warning system” in version 0.1, LINK stakeholders will have the chance to earn incentives for correctly identifying oracle networks that fail to adhere to commitments stated in Chainlink’s on-chain service-level agreement (SLA).
It will also have extra features like stake slashing to support quality and security and give LINK stakers a share of network user costs.
The loss prevention service will safeguard “participating sponsors when a supported oracle network deviates from its SLA” in the v2 version. In addition to staking benefits and network user fees, loss protection could start to provide rewards to LINK stakers.
Chainlink claims that due to “a reputation-and-stake-based node selection mechanism,” staking will become a crucial tool for node operators seeking to “get access to higher-value jobs and more fee opportunities in the Chainlink Network.”
It should be mentioned that Chainlink already offers a kind of collaterization equivalent to staking where node operators can decide to deposit their LINK tokens as collateral to guarantee data delivery services.
The long-term objectives of Chainlink revolve around making it a global standard with a growing and sustainable user base, which in turn offers greater opportunity of rewards for stakers who increase the network’s cryptoeconomic security and user assurances, according to Chainlink on 7 June 2022. “While the initial implementation of Chainlink staking is designed to minimise risk for participants and create a strong foundation, the long-term goals revolve around scaling Chainlink into a global standard with a growing and sustainable user base,” said Chainlink
The native coin of Chainlink, LINK, is used to pay Chainlink node operators for services such as converting data into blockchain readable formats, off-chain computing, and uptime assurances.
According to Chainlink, the LINK ERC677 token is built on Ethereum and “inherits functionality from the ERC20 token standard and permits token transfers to incorporate a data payload.”
The LINK token offering was started in September 2017 with a pre-sale offering price of $0.09 per token and a 20% bonus based on the investor’s participation time, according to the cryptocurrency research firm Messari.
A LINK public auction followed at a unit price of $0.11. 350 million LINK tokens were allocated throughout the two sales.
The total supply of LINK tokens is one billion. The following is the token distribution:
Investors in initial token sales received 35% of the total supply.
35% of the total supply was allotted to node operators and incentive rewards.
SmartContracts.com, the parent firm of Chainlink, was given the final 30% of LINK’s maximum supply.
The top 15 LINK-holding addresses were connected to smart contracts, according to data from Etherscan. As of August 2, 2022, over 580 million LINK tokens were locked in smart contracts, according to information from Messari.
According to CoinMarketCap data, Chainlink was the 24th-largest cryptocurrency network with a market capitalization of more than $3.3 billion as of August 2, 2022, and the circulating supply of LINK was estimated to be 469 million at that time.
LINK has increased in value by more than 300% during the last three years, rising from approximately $1.8 to its current price of roughly $7.10 on August 2, 2022.
One of LINK’s finest years in terms of price growth was 2020, when the token increased by nearly 1000%. Gains in LINK continued into 2021, and on May 10, 2021, they quickly reached an all-time high of $52.88.
After reaching its peak, LINK had strong selling pressure and lost more than 60% of its value for the remainder of 2021. At year’s end, the token was worth $19.50.
Losses at LINK have persisted through 2022. In the first seven months of 2022, the token has experienced five monthly losses, bringing its year-to-date losses, as of 2 August 2022, to nearly 63%.
LINK dropped to $5.30, nearly a two-year low, in June 2022. In July, the token recovered and saw a 22% increase in value.
On August 2, 2022, LINK was trading at roughly $7.10, 86% below its peak.
According to data from IntoTheBlock, on August 2, 2022, 81% of LINK holders were holding their tokens at a loss, compared to 61% of LINK holders who had held onto their tokens for more than a year.
For the purpose of creating an oracle node that offers open-access integrated assessment models for carbon pricing, Open Earth Foundation was awarded a Chainlink Grant on July 15.
In July 2022, Chainlink announced a number of integrations of its services across numerous chains and protocols, including Cardano-based DeFi network COTI, layer two Optimism on the Ethereum blockchain, the Solana NFT market, and others.
On June 30, Chainlink DON Hyphen made greenhouse gas flux data from the Copernicus space mission of the European Union available to blockchains.
On June 29, the analytics company LexiNexis Legal & Professional introduced the Chainlink node for tracking flight status data.
On June 27, Chainlink said that it had deployed more than 1,000 oracle networks across several blockchain networks.
On June 27, the Chainlink Foundation stated that it anticipated that no more than 5% of the total LINK supply, or 50 million LINK tokens, will be released into circulation over the ensuing nine months. Oracle network incentives and the staking launch will be supported by the distribution of LINK tokens.
On June 7th, 2022, Chainlink released a plan for its phased Chainlink Staking programme.
According to a short-term Chainlink coin price forecast by CoinCodex, the token’s value could increase by more than 9% to reach $7.87 by August 7 of 2022. On August 2, 2022, when CoinCodex predicted the price of Chainlink for one month, the token had dropped to $6.60.
Longer term, the Chainlink cryptocurrency price prediction made by algorithmic website Wallet Investor anticipated that the token would trade at an average price of $0.93 by the end of 2022. By the end of 2025, according to Wallet Investor’s Chainlink price projection, the token was predicted to trade for an average price of $1.459.
Long-term pricing performance for LINK was looked upon favourably by DigitalCoinPrice. In its Chainlink price forecast for 2030, DigitalCoinPrice projected that the token would trade on average for $32.63 in that year.
According to PricePrediction’s LINK price forecast, on August 2, 2022, the token would trade for $59.57.
Be aware that predictions of Chainlink pricing made by analysts and algorithms can be inaccurate. Forecasts shouldn’t be utilised in place of your own independent research.
Always do your own research and keep in mind that your choice to trade or invest should be based on your risk tolerance, market knowledge, portfolio size, and investing objectives.