What is @chainlink and why is it signficant?
$LINK is one of most important yet least understood protocols in Web3
Here’s a short explanation a 5-year old can undersand
(Great for those new to DeFi)
A microthread ⚡ 🧵
1/15
$LINK is one of most important yet least understood protocols in Web3
Here’s a short explanation a 5-year old can undersand
(Great for those new to DeFi)
A microthread ⚡ 🧵
1/15
2/15
This is a great guide for beginners, so retweet this thread to help your friends who aren't familiar with $LINK 👆
We'll cover
•What is an oracle?
•What problem does Chainlink solve?
•What are the use cases for $LINK?
•What’s the big picture?
Let's dig in!:
This is a great guide for beginners, so retweet this thread to help your friends who aren't familiar with $LINK 👆
We'll cover
•What is an oracle?
•What problem does Chainlink solve?
•What are the use cases for $LINK?
•What’s the big picture?
Let's dig in!:
3/15
🔶 What is an Oracle?
Blockchains have one major limitation – they are unable to access data from external systems
This is by design, like a computer without an internet connection, they maintain their isolation to guarantee security and streamline efficiency
🔶 What is an Oracle?
Blockchains have one major limitation – they are unable to access data from external systems
This is by design, like a computer without an internet connection, they maintain their isolation to guarantee security and streamline efficiency
4/15
Unfortunately, the vast majority of potential use cases for #Web3 require a connection to the outside world
Exchanges need accurate price information, insurance needs data to make decisions on policy payouts and many apps require market information to determine settlements
Unfortunately, the vast majority of potential use cases for #Web3 require a connection to the outside world
Exchanges need accurate price information, insurance needs data to make decisions on policy payouts and many apps require market information to determine settlements
5/15
The solution to this problem is known as an oracle, a separate piece of infrastructure that bridges a blockchain to real-world data
Oracles can source a variety of information including, price reports, weather, sporting scores, results of elections, etc…
The solution to this problem is known as an oracle, a separate piece of infrastructure that bridges a blockchain to real-world data
Oracles can source a variety of information including, price reports, weather, sporting scores, results of elections, etc…
6/15
🔶 Problem
While oracles solve one problem, they introduce another (centralization)
Oracles are vulnerable to hacking, denial of service, manipulation & abuse – in short, if an oracle is compromised, the entire system is compromised
This is known as the "Oracle Problem"
🔶 Problem
While oracles solve one problem, they introduce another (centralization)
Oracles are vulnerable to hacking, denial of service, manipulation & abuse – in short, if an oracle is compromised, the entire system is compromised
This is known as the "Oracle Problem"
7/15
🔶Solution
The solution is to rely on multiple oracles that can independently gather data and cross-check their results
This structure is known as a “decentralized oracle network” (“DON”)
In a DON, a single oracle can be compromised without harming the system
🔶Solution
The solution is to rely on multiple oracles that can independently gather data and cross-check their results
This structure is known as a “decentralized oracle network” (“DON”)
In a DON, a single oracle can be compromised without harming the system
8/15
🔶 Protocol Overview
Chainlink is the largest DON , hosting nearly 1,500 independent nodes that can provide clients with relevant data
The protocol offers solutions to a variety of industries including:
• DeFi
• Enterprise
• NFTs/ Gaming
• Social Impact
• Climate
🔶 Protocol Overview
Chainlink is the largest DON , hosting nearly 1,500 independent nodes that can provide clients with relevant data
The protocol offers solutions to a variety of industries including:
• DeFi
• Enterprise
• NFTs/ Gaming
• Social Impact
• Climate
9/15
🔹 DeFi
Chainlink provides real-time prices for a variety #DeFi uses including:
• DEXs
• Stablecoins
• Derivatives
• Insurance
• Yieldfarming
Notable partners include @synthetix_io, @AaveAave, @traderjoe_xyz, @LidoFinance, @BreederDodo and @LiquityProtocol
🔹 DeFi
Chainlink provides real-time prices for a variety #DeFi uses including:
• DEXs
• Stablecoins
• Derivatives
• Insurance
• Yieldfarming
Notable partners include @synthetix_io, @AaveAave, @traderjoe_xyz, @LidoFinance, @BreederDodo and @LiquityProtocol
10/15
+ Enterprise
The protocol provides enterprise-grade infrastructure to allow large corporations to access the Web3 ecosystem.
Notable enterprise partners include T-Systems, LexisNexis, Swisscom and Accuweather
+ Enterprise
The protocol provides enterprise-grade infrastructure to allow large corporations to access the Web3 ecosystem.
Notable enterprise partners include T-Systems, LexisNexis, Swisscom and Accuweather
11/15
🔹 NFTs & Gaming
Chainlink provides services for several players in the #NFT & #P2E gaming space including @AxieInfinity, @BoredApeYC & @illuviumio
Notaby, it provides a random number generator (#VRF) that assists with NFT creation, unpredictable gameplay & fair rewards
🔹 NFTs & Gaming
Chainlink provides services for several players in the #NFT & #P2E gaming space including @AxieInfinity, @BoredApeYC & @illuviumio
Notaby, it provides a random number generator (#VRF) that assists with NFT creation, unpredictable gameplay & fair rewards
12/15
🔹Social Impact
The protocol partners with several nonprofits, NGOs and other institutions to assist with sustainability, financial inclusion and public goods projects.
Notable partners include Technalia, Lemonade and Arbol
🔹Social Impact
The protocol partners with several nonprofits, NGOs and other institutions to assist with sustainability, financial inclusion and public goods projects.
Notable partners include Technalia, Lemonade and Arbol
13/15
🔹Climate Markets
Chainlink provides enterprise-grade middleware that help power climate markets
Notable partners include Hyphen, Floodlight and Correst
🔹Climate Markets
Chainlink provides enterprise-grade middleware that help power climate markets
Notable partners include Hyphen, Floodlight and Correst
14/15
🔶 Competitive Position
While there are dozens of oracles serving the #crypto market, Chainlink is by far the most popular with > 1,500 connections
(and this graphic is almost a year old now!)
Other notable players include Berry and Band Protocol
🔶 Competitive Position
While there are dozens of oracles serving the #crypto market, Chainlink is by far the most popular with > 1,500 connections
(and this graphic is almost a year old now!)
Other notable players include Berry and Band Protocol
For a much deeper dive into Chainlink, check out the following thread
It covers:
• How the protocol works
• Its competitive advantage
• Recent developments to the protocol
• The team behind Chainlink
• Why the $LINK token has the potential to be worth $1,000!
It covers:
• How the protocol works
• Its competitive advantage
• Recent developments to the protocol
• The team behind Chainlink
• Why the $LINK token has the potential to be worth $1,000!
That's a wrap!
If you enjoyed this thread:
1. Follow me @MTorygreen for fundamental analysis of DeFi and Web3 protoocls
2. RT the tweet below to share this thread with your audience
If you enjoyed this thread:
1. Follow me @MTorygreen for fundamental analysis of DeFi and Web3 protoocls
2. RT the tweet below to share this thread with your audience
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