So far, Chainlink has mainly supplied smart contracts for applications from Decentralized Finance (DeFi) with data from blockchain networks. In the future, however, data from the real world will be transferred to the blockchain – how can that be achieved?
Chainlink also saw a massive price decline after the crypto crash in May. Since the all-time high of 52.70 US dollars, the price of LINK plunged by more than 50 percent and at times even traded below the price mark of 17 US dollars.
In the meantime, the price of the cryptocurrency has recovered somewhat and at the time of going to press a single LINK token costs 20.96 US dollars. With a 24-hour plus of 7.65 percent, Chainlink is one of the crypto winners of the day – only FTT, LUNA, DOT and CAKE were even more successful.
What does Chainlink do?
If you want to understand Chainlink holistically, then you should consider the development of the blockchain as an evolution. Initially, blockchain networks focused on peer-to-peer (P2P) transactions. This made it possible for the first time to transfer assets cheaply and without a middleman.
Then came the concept of smart contracts. In the traditional or “analog” business world, contracts typically require a human intermediary (broker, notary, etc.) to ensure contractual integrity. However, blockchain technology can theoretically replace such intermediaries and thereby become a perfect, error-free intermediary. Chainlink is already showing how this can work in decentralized finance applications. A large number of decentralized applications access so-called chainlink oracles in order to receive data from blockchain networks, which their smart contracts can use as a guide.
For example, in addition to Ethereum DeFi applications, well-known crypto projects such as Filecoin (FIL) and Polkadot (DOT) also use Chainlink.
The problem with this, however, is that such contractual agreements have to take place within the confines of a blockchain network – this is exactly what Chainlink wants to change. Chainlink can supply smart contracts with data from the real world. This enables blockchains to access data outside the blockchain (weather reports, course data, sports results, etc.).
Oracle integrations are increasing
In particular, the so-called VRF (Verifiable Random Function) technology from Chainlink is enjoying growing popularity. VRF is a generator of random numbers that is said to be particularly resistant to manipulation. With the help of VRF, Chainlink wants to provide blockchain applications with a tamper-proof and verifiable source for data. More and more projects are already using VRF, especially in the boom sector of non-fungible tokens (NFT). For example, the Korean gaming platform Bora, the NFT platform Uniqyl and the NFT project Upshot all rely on Chainlink’s VRF technology.
Additionally, DotMoovs announced on July 6th that it would integrate VRF. DotMoovs wants to use VRF to bring data from the real world to the blockchain in order to create a virtual environment in which athletes can compete with one another. With the help of blockchain technology, artificial intelligence and Chainlink technology, this should be possible.
To motivate the athletes, DotMoovs holds tournaments in which the athletes can compete against each other – winners receive MOOV tokens and NFT. In addition, the project is supported by Ricardo Quaresma and the football legend, among others Luís Figo supported.