Why was Chainlink invented?
The use of blockchain technology has grown to cover more than access to peer-to-peer online money transactions. One of today’s biggest uses is through smart contract technology, which allows you to enter into contracts that are automatically executed when defined conditions are met. However, there is a problem if the smart contract needs to access external data as part of its automatic capabilities. The problem here is that the blockchain doesn’t have a built-in mechanism for accessing external data. They rely on data feeds that provide everything from information such as prices, insurance, temperatures, the Internet of Things, and more.
Another problem is that data from third-party APIs regarding market prices and other information may not be accurate. Chainlink provides a technical solution to this problem through a network of distributed nodes called Oracle. Oracle provides accurate data and Chainlink gives them incentives through a reward system that uses LINK tokens.
How does Chainlink work and what technology is behind it?
Chainlink relies on Oracle’s network to provide secure and reliable data for on-chain integration into smart contracts. This technology works through three types of contracts: order matching, reputation, and aggregation.
The mechanism is as follows.
When a smart contract user needs to connect to a real data source, it issues a service level agreement (SLA) request via the Chainlink protocol.
Chainlink then uses the information in the request to select an oracle (match order) and provide the required data.
This last step works through an aggregate contract where the most accurate results from Oracle are entered on the chain. This causes the internal system to verify the accuracy of the source .
Those who want to access real-world data pay a small fee. It is deposited in a native LINK token and is used to give the node an incentive.
As the demand for Chainlink technology grows, scalability issues are emerging. However, the team behind the project has launched a second tier network called Chainlink 2.0. The new project will provide a ” Distributed Oracle Network ” (DON). This allows Oracle to process external data sources off-chain before registering with the blockchain.
The growth that accompanies the adoption of DON puts Chainlink at the forefront of bringing traditional data entry into the chain for the execution of smart contracts.
What are the benefits of chain links?
One of the most useful features of chain links is to connect blockchain smart contracts to real-world data sources.
Oracle is important in the blockchain and crypto sector. Decentralized Exchange (DEX) and Decentralized Finance (DeFi) protocols use Oracle. The former accesses the price of cryptocurrencies and provides the same to customers.
By providing access to off-block chain sources for on-chain smart contracts, chain links also help improve the security and accuracy of information. Chain links also allow untrusted transactions and communications without the need for central authority.
Through end-to-end decentralized and blockchain-agnostic capabilities, the crypto community enjoys cross-network connectivity. Today, both public and private blockchain users can benefit from accurate data sources.
Using Oracle’s network means that there is no single point of failure if one of the nodes is compromised.
How secure are chain links?
Determining how secure a cryptocurrency project is may not be easy. This is because the early sectors still have mechanisms in place to make the project more secure. However, the blockchain itself is secure, and chain links benefit from components such as tamper-proof and censorship. -resistant transactions.
For chain links, a growing ecosystem that benefits from decentralization, the use of provable secure nodes has made all users on the network more secure.
Oracle also works in a transparent environment, allowing network users to publicly view and query their reputation. The important thing is that Oracle signs all the data cryptographically before transferring it to the network for aggregation.
Considering the potential for attacks and data manipulation, Chain Link has developed a key booking proof (PoR) mechanism to ensure data integrity.
In the DeFi sector, where users rely on real-time data, PoR algorithms protect users from malicious activity that can occur from off-chain sources. In this way, both decentralized financial protocols and traditional financial systems can operate in a secure environment.
Which team is working on chain link development?
Chainlink is one of the most tech-savvy teams in the field and benefits from the work of a world-class group of developers. We also have a dedicated team of advisors, some from the world’s top academic institutions.
Chainlink teams include:
Sergei Nazarov
Nazarov is the co-founder and CEO of Chainlink and founded the Smart Contract, which started the project in 2014. Sergey also founded the crypto exchange Secure Asset Exchange and the distributed email service CryptoMail.
Steve Ellis
Ellis is the company’s Chief Technology Officer (CTO). The software engineer co-founded Chainlink with Nazarov in collaboration with the cryptocurrency exchange project.
Ali Jewels
Juels is a technical advisor who helped create the Chainlink White Paper. He is a professor of computer science at Cornell Tech and previously worked as director of the crypto project IC3.
Andrew Miller
Miller is also a technical advisor to Chainlink and holds the same position in the crypto projects Zcash and Tezos.
Which financial institution is invested in Chainlink?
Chainlink partners with more than 30 companies in different sectors around the world. The growth of the company has been brought about as more people find it easy to use any API to procure off-chain data for smart contracts. The wide range of use case features of the protocol attracts multiple financial institutions and companies that have invested in it.
That is, apart from powering major DeFi networks such as Aave, Synthetix, and yearn. Finance, the chainlink ecosystem is a major conglomerate and startup component. Some of these partners and the purposes of using chainlinks are:
OpenLaw
OpenLaw is owned by ConsenSys. A blockchain company focused on smart contracts for legal contracts. The Oracle integration of ChainLink allows companies to transfer records on the chain. The partnership was announced in 2018.
RTrade Technologies Ltd
RTrade Technologies is based in Vancouver, Canada. The company uses chainlinks in distributed data storage applications and financial data records. The two companies started cooperation in 2018.
One chain
Wanchain is a Singapore-based blockchain company that uses Chainlink Oracle to access financial market data. Wanchain main goal is to promote blockchain interoperability. This is a concept that will greatly benefit from secure and accurate off-chain data aggregated on chain links. The two companies started cooperation in 2018.
Web 3 Foundation
Chainlink and the Web3 Foundation partnered in 2018, and the Swiss Foundation used off-chain data feeds and APIs to access smart contract data for payments. This partnership has led the blockchain protocol Polkadot to use the chainlinks Oracle ecosystem.
Fast
A proof-of-concept demonstration project reported that Oracle was used in a test environment to push financial data from several banks and financial companies, including Barclays, Santander, BNP Paribas, and Fidelity.
Google Cloud
Google Cloud has integrated smart contract oracle tools for BigQuery services. The partnership was announced in 2019.
