While many view @chainlink as an oracle solution for price feeds, the Chainlink vision stretches far beyond that.
This thread will cover the value proposition of $LINK and how it can become the foundational layer that connects Web 2 to Web 3.
๐งต
This thread will cover the value proposition of $LINK and how it can become the foundational layer that connects Web 2 to Web 3.
๐งต
1/ This thread will go over
- Infrastructure as a Service
- CCIP
- Chainlink 2.0 and Sustainable Economies
- Bridging Web 2 and Web 3
- Infrastructure as a Service
- CCIP
- Chainlink 2.0 and Sustainable Economies
- Bridging Web 2 and Web 3
2/ While most projects discussed on CT are focused on blockchain applications (NFTs, Lending, Perps), there is less focus on the infrastructure needed to manage these apps.
Chainlink is the only project that builds this out at scale with DECO, CCIP, VRF, FSS and more.
Chainlink is the only project that builds this out at scale with DECO, CCIP, VRF, FSS and more.
3/ CCIP
CCIP is a cross chain protocol architecture that allows for blockchains to interact between different blockchains.
It seeks to be a major factor in onboarding Web 2 institutions to Web 3 and bridging the wall between these institutions.
CCIP is a cross chain protocol architecture that allows for blockchains to interact between different blockchains.
It seeks to be a major factor in onboarding Web 2 institutions to Web 3 and bridging the wall between these institutions.
4/ While CCIP serves a similar use case to products like Layerzero, CCIP is more than just a bridge with a programmable layer.
Hybrid smart contracts will allow for interactions between on chain and off chain smart contracts as well as cross chain execution.
Hybrid smart contracts will allow for interactions between on chain and off chain smart contracts as well as cross chain execution.
5/ If successful, CCIP could be the solution to fragmented liquidity and the bridge between Web 2 and Web 3 networks with its enterprise solution.
We have already seen hints of this with the teamโs close connections with SWIFT and BNY Mellon.
We have already seen hints of this with the teamโs close connections with SWIFT and BNY Mellon.
6/ Why Chainlink for Web 2 onboarding?
The simple reason is because of DECO, Chainlink's implementation of Zero Knowledge proofs that will allow for information to be shared on chain without giving away sensitive information like identity.
The simple reason is because of DECO, Chainlink's implementation of Zero Knowledge proofs that will allow for information to be shared on chain without giving away sensitive information like identity.
7/ This is core infrastructure that Web 2 institutions need before they consider using blockchain to store and transmit data.
As far as I know, Chainlink is the only team that is pushing DECO since it is also the premiere solution for transmitting Off-Chain Data on chain.
As far as I know, Chainlink is the only team that is pushing DECO since it is also the premiere solution for transmitting Off-Chain Data on chain.
8/ Web 2 Connections
Itโs also no secret that Chainlink has institutional connections.
Chainlink onboarded Former Google CEO Eric Schmidt in 2021 as an advisor who has expanded upon Chainlinkโs network with large institutions.
Itโs also no secret that Chainlink has institutional connections.
Chainlink onboarded Former Google CEO Eric Schmidt in 2021 as an advisor who has expanded upon Chainlinkโs network with large institutions.
9/ You can just look at the Smartcon 2022 guest list to see how well connected the project is.
Representatives from big names like Swift, BNY Mellon, DTCC, Microsoft, and more all showed up to the event to talk about Chainlink and Web3.
Representatives from big names like Swift, BNY Mellon, DTCC, Microsoft, and more all showed up to the event to talk about Chainlink and Web3.
10/ Being connected with these large players in TradFi is key to getting these institutions to work with you.
Chainlink is looking at what kind of services Web 2 needs to use Web 3 and building it out in advance.
Chainlink is looking at what kind of services Web 2 needs to use Web 3 and building it out in advance.
11/ Sustainable LINK Economy
It seems like many associate Chainlink 2.0 with the advent of $LINK staking.
More than that, Chainlink 2.0 is a broader shift from bootstrapping the ecosystem to creating a sustainable economy that can function without external incentives.
It seems like many associate Chainlink 2.0 with the advent of $LINK staking.
More than that, Chainlink 2.0 is a broader shift from bootstrapping the ecosystem to creating a sustainable economy that can function without external incentives.
12/ Chainlink 2.0 does this through
- Build and Scale
- Staking
- OCR 2.0
- Build and Scale
- Staking
- OCR 2.0
13/ Chainlink Build & Scale
One skepticism I had with Chainlink is whether many institutions would buy $LINK tokens in order to use the protocol.
The release of Bulid and Scale solves this problem by aligning incentives between protocols and Noder Operators.
One skepticism I had with Chainlink is whether many institutions would buy $LINK tokens in order to use the protocol.
The release of Bulid and Scale solves this problem by aligning incentives between protocols and Noder Operators.
14/ With Build, protocols can give a portion of their token supply to Chainlink in exchange for the features listed below.
This diversifies the revenue stream for Node Operators while making Chainlink services more accessible.
This diversifies the revenue stream for Node Operators while making Chainlink services more accessible.
15/ Similarly with Scale, Projects can cover oracle operating costs in exchange for more advanced oracle solutions.
This helps Operators cut costs to boost profitability without Node Incentives, which is a big source of selling pressure.
This helps Operators cut costs to boost profitability without Node Incentives, which is a big source of selling pressure.
16/ Staking
Thereโs a few unique points about Chainlink staking that make it integral to the security of the protocol instead of another inflation mechanism.
Thereโs a few unique points about Chainlink staking that make it integral to the security of the protocol instead of another inflation mechanism.
17/ Node operators that have more LINK staked will receive more high quality jobs, which incentivizes the operator to generate a higher return for stakers.
Super-Linear staking also helps secure Chainlink with less funds needed.
Super-Linear staking also helps secure Chainlink with less funds needed.
18/ Off Chain Reporting 2.0
OCR 2.0 aims to cut gas costs by around 25% and allow for customizable forms of data to be transmitted through oracles.
This further supports node operators to be profitable while also allowing for more off-chain data to be passed on chain.
OCR 2.0 aims to cut gas costs by around 25% and allow for customizable forms of data to be transmitted through oracles.
This further supports node operators to be profitable while also allowing for more off-chain data to be passed on chain.
19/ OCR 2.0 can scale Oracles to transmit more than just price feeds. Imagine transmitting live data of Real world assets (RWA) or having transparent insurance quotes.
By making costs more efficient, a blockchain powered future becomes possible.
By making costs more efficient, a blockchain powered future becomes possible.
20/ These initiatives will take quite some time to be built out and $LINK holders may not see results until Node Operators are able to operate without incentives.
LINK 2.0 seeks to increase node operator profitability so that the economy can be truly sustainable.
LINK 2.0 seeks to increase node operator profitability so that the economy can be truly sustainable.
21/ Once Node Operators are profitable, Chainlink can start accruing more value to the $LINK token. This will take time.
22/ Risks
Chainlink has an exemplar track record, but there will always be risk with smart contracts so keep that in mind.
The team has a 4 of 9 multisig with admin controls. The team did hire an experienced talent with Ben Chan but please do research and assess your own risk.
Chainlink has an exemplar track record, but there will always be risk with smart contracts so keep that in mind.
The team has a 4 of 9 multisig with admin controls. The team did hire an experienced talent with Ben Chan but please do research and assess your own risk.
23/ Conclusion
Chainlink is building out cutting edge products in the space that support the needs of Web 2 companies that want to use blockchain.
If Chainlink can realize its vision of sustainability, it can be the key infrastructure of not just DeFi but world applications.
Chainlink is building out cutting edge products in the space that support the needs of Web 2 companies that want to use blockchain.
If Chainlink can realize its vision of sustainability, it can be the key infrastructure of not just DeFi but world applications.
24/ This will start with ensuring profitability for Node Operators. Once Node Operators are profitable, Chainlink can start accruing more value to the $LINK token.
Disclosure: I have been accumulating Link for the past few months and aim to continue on good dips.
If you enjoyed this thread, a Like, Follow, & Retweet helps out a lot!
This thread is for entertainment purposes only. Not Financial Advice.
If you enjoyed this thread, a Like, Follow, & Retweet helps out a lot!
This thread is for entertainment purposes only. Not Financial Advice.
Chainlink Community Mentions
@chainlink
@ChainLinkGod
@lildondiablo
@LINKNewsOracle
@ChainlinkP
@CryptoDavid_
@nas49001254
@bob4punk
@DefiDrew
@uCeLiNk
@chainlink
@ChainLinkGod
@lildondiablo
@LINKNewsOracle
@ChainlinkP
@CryptoDavid_
@nas49001254
@bob4punk
@DefiDrew
@uCeLiNk
@chainlink @ChainLinkGod @lildondiablo @LINKNewsOracle @ChainlinkP @CryptoDavid_ @nas49001254 @bob4punk @DefiDrew @uCeLiNk Special Mentions
@Only1temmy
@WinterSoldierxz
@Chinchillah_
@Slappjakke
@rektfencer
@arndxt_xo
@0xFlips
@0xTindorr
@Louround_
@GrowWithPassive
@DeFi_Cheetah
@ViktorDefi
@TheDeFISaint
@thelearningpill
@_FabianHD
@schizoxbt
@0xSalazar
@0xsurferboy
@Only1temmy
@WinterSoldierxz
@Chinchillah_
@Slappjakke
@rektfencer
@arndxt_xo
@0xFlips
@0xTindorr
@Louround_
@GrowWithPassive
@DeFi_Cheetah
@ViktorDefi
@TheDeFISaint
@thelearningpill
@_FabianHD
@schizoxbt
@0xSalazar
@0xsurferboy
Loading suggestions...