Introduction
Chainlink (LINK) is a decentralized oracle network designed to provide smart contracts with reliable external data. #Chainlink was founded in 2017 by Sergey Nazarov and Steve Ellis. The network provides the ability for blockchains to interact with external data, which is critical for the implementation of many blockchain-based applications.
Main components of Chainlink
Decentralized oracles
Chainlink uses a decentralized network of oracles to provide data to smart contracts, eliminating the dependence on a single centralized data source. This increases the reliability and accuracy of the data as the information is verified by multiple oracles before transmission.
Hybrid smart contracts
Hybrid smart contracts combine the capabilities of on-chain and off-chain components, allowing smart contracts to use data from external sources such as price indices, weather data and financial transactions. This significantly expands the functionality of smart contracts.
DON (Decentralized Network Oracles)
#DON is a network run by a committee of Chainlink nodes. These nodes support various oracle functions, providing interfaces for smart contracts to vast off-chain resources and computing power.
Utility and use of LINK token
Token utility
The LINK token is used to pay for oracle services on the Chainlink network. Nodes that provide accurate and reliable data are rewarded with LINK, which incentivizes the accuracy and timeliness of the information provided.
Use in DeFi
Chainlink is actively used in various DeFi projects such as Aave and Synthetix to obtain reliable asset price data, which is necessary for the correct functioning of smart contracts.
Partnerships and integrations
Key partnerships
- Google: Chainlink is integrated with Google to provide data to smart contracts.
- SWIFT: Partnership with SWIFT for banking data integration.
- Ethereum Sidechains: Integrations with chains such as Harmony, Celer and Matic.
Examples of using
Chainlink is used to ensure data reliability in financial services, decentralized finance (DeFi), insurance, gaming and other industries.
Market data and technical indicators
Current data
- Price: $17.81
- Trading volume for 24 hours (LINK): 2.97 million LINK
- 24-hour trading volume (USDT): 53.85 million USDT
- Capitalization: $10.51 billion
- Circulating supply: 587.1 million LINK
- Maximum supply: 1 billion LINK
- All Time High: $52.8761 (May 10, 2021)
- Historical low: $0.1263 (September 23, 2017)
Technical indicators
1. EMA (Exponential Moving Average)
- MOTHER(7): 17.845
- MOTHER (25): 16,532
- MOTHER(99): 16.218
- EMA helps smooth out price fluctuations and identify trends. If EMA(7) is above EMA(25), it may indicate an uptrend.
2. MACD (Moving Average Convergence/Divergence)
- MACD (1 day): 1.129
- This indicator shows changes in the strength and direction of the trend. When the MACD line crosses the signal line from below to above, it could be a buy signal.
3. RSI (Relative Strength Index)
- RSI(6): 57.090
- RSI(12): 61.704
- RSI(24): 57.750
- RSI measures the speed and price change of an asset, helping to determine whether an asset is overbought or oversold. An RSI reading above 70 may indicate overbought, while an RSI reading below 30 may indicate oversold conditions.
Fund flows
- Analysis of funds flow for 24 hours:
- Purchase (LINK): 2.99 million LINK
- Sales (LINK): 3.48 million LINK
- Receipt of funds: -486,709.90 LINK
- A negative cash flow value indicates that there were more sales than purchases in the last 24 hours.
Margin data
1. Growth of marginal debt
- The indicator shows changes in the total amount of marginal debt for a certain period. Increasing debt may indicate increased interest in margin trading.
2. Ratio of long and short margin positions
- The indicator shows the relationship between long (purchase of an asset with the aim of its growth) and short (sale of an asset with the aim of its fall) margin positions. If the ratio of long positions is significantly higher than short positions, this may indicate a bull market.
3. Isolated Margin Loan Amount Ratio
- The indicator reflects the ratio of the total loan amount to the total amount of assets in an isolated marginal position. A high ratio may indicate a high level of risk.
Benefits and Risks
Positive factors
1. Decentralization
- Chainlink uses a decentralized network of oracles, which reduces the risks of centralized errors and fraud.
2. Interoperability
- Chainlink allows blockchains to interact with external data and each other, expanding the capabilities of smart contracts.
3. Flexibility
- Support for various data types and APIs makes Chainlink a universal tool for many applications.
4. Reputation and partnerships
- Support from large companies and integration with leading blockchain platforms increases trust in Chainlink.
Risks
1. Security
- Although Chainlink uses advanced security techniques, vulnerabilities may exist, especially in new technologies such as TEE (Trusted Computing Environments).
2. Competition
- There are other projects such as Band Protocol and API3 that offer similar solutions, which could impact Chainlink's market share.
3. Regulations
- Changes in legislation may affect the use and distribution of blockchain technologies and cryptocurrencies.
Summary and conclusions
Chainlink is a key player in the blockchain ecosystem thanks to its decentralized oracles that provide smart contracts with reliable external data. Partnerships with giants such as Google and SWIFT, as well as widespread use in DeFi platforms, indicate its significance and potential for further growth. However, it is important to consider competition and possible technical and regulatory risks. Overall, Chainlink has significant advantages and prospects that make it attractive to use and invest in the long term.
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This data is taken from various sources, including the Chainlink white paper and current market data. To gain a deeper understanding of technical indicators and fund flows, it is recommended to further explore the available resources and materials.
