@Pi-Slices
MAJR Coins is a new initiative highlighting top projects for investors. Available for a limited time before going behind the paywall.
This is not investment advice. Do your own research. These are personal opinions only.
- MAJR Team
Chainlink
Connect your smart contract to the outside world.
Chainlink's decentralized oracle network provides reliable, tamper-proof inputs and outputs for complex smart contracts on any blockchain.
Brief:
In this addition of MAJR Coins, we’ve broken down one of biggest and most popular projects in crypto, Chainlink. We cover the technology and its purpose and the team and its investors. We detail the pros and cons and provide a token rating score based on the project’s fundamentals, pumpamentals and market sentiment. The token information can be found at the end.
Brevin White
@brevinwhite
Universally Connected Smart Contracts
Decentralized finance (DeFi) continues to evolve and is home to some of the most profound and innovative projects in the blockchain industry. DeFi uses blockchain to manage financial transactions and aims to democratize finance by replacing centralized institutions with a peer-to-peer system utilizing smart contract technology. The open and permissionless world of DeFi has the potential to reimagine and expand access to traditional financial services, from banking, loans, and mortgages, to more complicated digital asset trading services.
Smart contracts are computer code that’s able to be stored and executed on a blockchain. Smart contracts self-execute when and if certain predetermined conditions are met between the different parties. This revolutionary technology can create massive marketplace efficiencies by removing human intervention and allowing business logic to self execute with data on-chain.
DeFi has been the primary breeding ground for projects exploring different use cases for smart contracts. Blockchains and smart contracts are functionally limited to the data on-chain and therefore cannot directly operate with data that’s off-chain or data from the real world. This data needs to be brought on-chain and is a job for oracles.
Chainlink is the leading oracle network for DeFi and is attempting to be the number one oracle for the digital asset ecosystem.
What is Chainlink?
Chainlink is a decentralized oracle network that provides real-world data and information to smart contracts on the Ethereum blockchain. It’s a top twenty market cap coin and the most popular oracle project by users and partners.
The Oracle Problem
It is important to remember that a blockchain is completely decentralized and consequently cut off from the rest of the world. This is helpful in regards to maintaining the security and integrity of a given network, but it provides limitations to what data inputs the protocol can access and accept. Chainlink solves this by bridging the gap between the outside world and blockchain. This allows for a network to not only be highly secure, but also versatile.
How it Works
Since Chainlink is decentralized, it enables the network to provide real-world, off-chain data and connect it with on-chain data. Like most blockchains, the protocol operates and functions using a network of nodes to extract external data and provide it to the smart contracts.
Here is a breakdown of the process.
A smart contract requires real-world data and puts out a request for the specific data to Chainlink.
The Chainlink protocol registers the event and turns it into a corresponding smart contract called a Chainlink Service Level Agreement (SLA) Contract. The Chainlink SLA Contract manufactures three sub-contracts: a Chainlink Order-Matching Contract, a Chainlink Reputation Contract, and a Chainlink Aggregating Contract. These all have a specific purpose to accomplish and fulfill the request.
The Chainlink Order-Matching Contract delivers the Requesting Contract’s request to Chainlink nodes, takes their bids on the request, and selects the right number and type of nodes to fulfill the request.
The Chainlink Reputation Contract checks a data provider’s track record to verify its authenticity and quality. It then evaluates and discards disreputable or unreliable nodes.
The Chainlink Aggregating Contract takes all the data from a single or multiple sources, validates it, and reconciles it for an accurate result.
This is a pretty powerful advancement for blockchain because Chainlink can gather and verify the data from multiple sources. Based on the way the protocol was constructed and engineered, Chainlink can accurately synthesize which sources are trustworthy. This feature enhances the quality of the end result provided and assists in protecting the smart contracts from various attacks.
Nodes are also given the option to stake on the network showing their commitment to the project for a longer duration of time. Nodes with a greater stake are more likely to be selected to fulfill a given request. They are incentivized to conduct themselves in a responsible, reliable manner and are rewarded with the LINK currency by doing so.
The LINK Token
The currency that is used as payment for the use of Chainlink and its nodes is called LINK. Prices are set by the node operator based on demand and current market for the data being provided.
Since Chainlink operates on the Ethereum protocol, LINK is an ERC-20 token. Like Bitcoin, there is a fixed supply for LINK at 1 billion tokens. 32 million of the total amount were sold during the initial coin offering (ICO) back in September 2017. The team behind Chainlink has roughly 30%, 300 million tokens, in their possession.
LINK currently ranks 15th in total market cap being valued at just over $7 billion. At the time of writing, LINK is $16.74 which is 68% off its all-time high of $52.70 in May.
You can easily buy LINK on top U.S. exchanges such as Coinbase, Gemini, Kraken and Binance. It can be bought and sold for fiat or other digital currencies.
The Team
The team at Chainlink is led by a prominent group.
It was founded by Sergey Nazarov in 2014. He is an NYU grad with a background in finance before becoming deeply embedded into the crypto space, particularly with smart contracts.
The Vice President of Engineering is held Ben Chan. Chan previously held the CTO position at BitGo.
Ari Juels, previously the Chief Scientist of RSA, serves as a Technology Advisor as well. Juels is a professor of computer science in the Jacobs Institute at Cornell Tech and a Co-director of IC3 (Initiative for Cryptocurrencies and Contracts).
“Top-tier developers, academics, and entrepreneurs across the world are actively working to accelerate Chainlink adoption and expand the capabilities of smart contracts.”
Chainlink
MAJR Conclusion
Chainlink overcomes some of the most difficult challenges facing smart contracts. Its oracle technology has created a reliable and efficient way to provide accurate off-chain data to smart contracts on enabled blockchains. It eliminates the trust issues associated with a centralized oracle network that could potentially give false or manipulated data.
Aside from the technology, Chainlink is widely adopted and integrated with hundreds of projects across the crypto ecosystem. These include some notable names such as Polkadot, Aave, Synthetix, Celsius, Terra, Kraken and more. Chainlink is also a top protocol with institutional exposure. Chainlink is part of institutional investor products such as Grayscale’s Digital Large Cap Trust and borrowing and lending products at BlockFi and Celsius.
Chainlink has one of the biggest and most engaged communities, the LINK Marines. The LINK marines are passionate supporters of the oracle network. They’re extremely active across social platforms defending the projects by spreading awareness via tweets, blog posts and memes.
Chainlink is a strong project with a purposeful blockchain. It has a proven team and track record as other developers integrate it. We believe this is a top project that every investor should take a look at and are very eager to see Chainlink reach its potential.
Sentiment Data
Chainlink saw a spike in social sentiment and price during the DeFi’s 2020 summer bull market. The price and social data has cooled off since and has trended downward with the rest of the crypto market since May.
Pros
Market Cap - is currently $8 billion and well off it’s $21 billion highs.
Price - undervalued and priced at a discount compared to trend and previous all time highs.
Network Integrations - it’s the most mature decentralized oracle network with many partnerships.
Use Case - Chainlink solves a very important problem for blockchains and smart contracts by bringing off-chain data from the analog world to the digital world and on-chain. As the smart contract ecosystem grows, then so will the demand for Chainlink. Chainlink’s price feed data will be instrumental for DeFi.
Team - outstanding and experienced team with quality leadership. CEO, Sergey Nazarov is a major thought leader in the space.
Institutional Exposure - Chainlink is one of the main projects that have institutional interest and is included in investment grade products.
Liquidity - LINK is on most US exchanges and is fungible with other ERC-20 tokens on major decentralized exchanges.
MAJR Rating: 65 / 70
Narrative: 9.5
Community: 9.6
Team: 9.4
Tech: 9.1
Liquidity: 9.2
Tokenomics: 8.9
Potential for Growth: 9.3
MAJR’s Top Projects:
Bitcoin, Ethereum, Polkadot, Kusama, Chainlink, Solana, Decentraland, Uniswap, Aave, Enjin, Maker, Filecoin, Terra, Litecoin
MAJR’s Simple Investment Strategies:
100% BTC - Min. Risk
80% BTC / 20% ETH - Min. Risk
50% BTC / 50% ETH - Med. Risk
50% BTC / 25% ETH / 25% [insert coin above] - High Risk
Reminder:
Content is moving behind the paywall this month. Subscribe to get the daily newsletter, digital asset research and analysis and exclusive articles and media.
THIS IS NOT FINANCIAL ADVICE. IT’S IMPORTANT TO DO YOUR OWN RESEARCH. INVESTING IN CRYPTOCURRENCY OR ANYTHING FOR THAT MATTER COMES WITH RISK. THE INFORMATION PRESENTED IN THIS NEWSLETTER IS FOR INFORMATION AND ENTERTAINMENT PURPOSES ONLY.