Chainlink recently topped a poll of blockchain projects expected to make the most technical progress in 2020. The platform allows developers to securely launch a smart contract by implementing off-chain price data into their on-chain applications, verified by a decentralized oracle network.
With the number of oracle networks available increasing, Chainlink is creating a vast and valuable public resource, Sergey Nazarov, CEO of platform developer SmartContract, told Decrypt.
A data rich environment of inputs
“There's been explosive growth in the amount of oracle networks available,” Nazarov said, adding that this “data rich environment of inputs that people can easily use,” will help boost the development of DeFi applications.
Key to this aspiration are the projects that have integrated Chainlink to date. They include non-collateral loan provider Aave; Loopring, an open protocol for non-custodial exchanges, and Synthetix, a platform which hosts on-chain synthetic assets, or “synths,”—ERC20 tokens that track the value of assets like gold, stocks and indices in the real world.
Users such as Synthetix bring new oracle networks to the platform, said Nazarov. The feeds that Synthetix requested (XAU/USD onchain price for instance) can now be accessed by any other dapp for a small fee, leading to greater utility and lower costs for everyone.
He explained that it’s cheaper to use a Chainlink oracle network, with seven to 21 nodes, than to broadcast from one node.
“Using our local networks costs people much less than it does for them to broadcast the data themselves, and they get multiples more security by using us,” said Nazarov.
The new resource also has a user friendly interface for information about the infrastructure, functionality, and current or historical data of the oracle networks which secure the prices, an accompanying blog post explains.
“We're making a public good that people need, and, as enough people use the public good, it becomes its own economically sustainable public resource,” he said.
Demand for Chainlink’s oracles is growing
In October, market intelligence firm Glassnode published data showing that demand for Chainlink oracles has grown at a steady pace.
#Chainlink oracle usage is on the rise.
Since May, an ETH/USD reference data contract has sent 330,000+ transactions of 0.333 $LINK to various oracle addresses.
— glassnode (@glassnode) October 7, 2019
The onchain data tool for crypto investors notes that 80% of all daily LINK transfers were for an ETH/USD reference data contract. With many more popular pairs now added—including BTC/ETH, BTC/USD, USD/GBP—developers have added scope. And “plenty more oracles are in the works,” according to Nazarov.
“The fact that we're launching so many of these oracle networks so rapidly is really a function of demand,” he said. “There’s been so much demand for all these different networks, I wouldn't be surprised if we doubled that number sometime this year.”
Did we mention that Nazarov was sounding a little bullish these days? But he still doesn’t talk about the effect on Chainlink's token, LINK. It's up more than 60% this month. That speaks for itself.