Chainlink (LINK): Oracle Solutions for Hybrid Smart Contracts

Chainlink (LINK): Oracle Solutions for Hybrid Smart Contracts

Chainlink (LINK) is an innovative abstraction layer that connects smart contracts with real-time and external data. For example, the relevant information from the stock market or agricultural industry can be integrated into specific smart contracts through a series of conditions and plausible outcomes. The decentralized participation allows blockchain users to become better integrated with external (non-crypto) markets.

Chainlink may also serve as an oracle aggregator, thus accumulating target data from reputable sources. In this manner, the applications of smart contracts may be extended considerably. Chainlink is closely integrated with Ethereum (as the major platform for smart contracts) and dApps (because it offers maximum flexibility and enhanced functionality).

The more connected blockchain system can be beneficial for millions of users, thus ensuring the higher sustainability of various blockchain solutions.

Chainlink’s major innovation is the integration of off-chain data into smart contracts’ functionality, enabling users to make blockchain decisions based on the changes observed in the external market. 

LINK is the platform’s native token, and its current market price is $17.99 with a current market capitalization of $8.4 billion, ranking it the 22nd among the largest cryptocurrencies in terms of their market capitalization. LINK’s circulating supply is 467 million tokens with the maximum supply being equal to 1 billion.

Although most of its tokens will still be issued in the following years, LINK maintains the gradual approach to increasing its circulating supply to address investors’ demand and ensure its growing market capitalization. 

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Figure 1. Chainlink’s Functionality; Data source – Genesis Block

Through connecting various markets and data sources, Chainlink allows determining the actual outcomes according to the initial conditions described in corresponding smart contracts. Users also become able to send payments anywhere as well as adjust them according to real-time data and external market conditions. 

The long-term dynamics of LINK’s price and capitalization depend on the following major factors: the complexity of the blockchain network and new solutions emerging; the degree of on-chain functionality integration with external markets; and the overall demand for smart contracts among crypto users.

As all of the above factors are expected to become even more important within the following years, the demand for LINK will increase proportionally. Considering the fact that other oracles cannot successfully compete with Chainlink, its price should inevitably increase in the long run.

At the same time, it should also be included in the portfolio with other major cryptocurrencies, such as BTC, ETH, SOL, etc.

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Figure 2. LINK’s Price Dynamics (1-Year); Data source – CoinMarketCap

In the short run, there is a strong support level at $14, and LINK has successfully used this level to continue appreciating within the past week.

However, the following two resistance levels may constitute the main challenge for it approaching its all-time high levels. The first one is the resistance at the price level of $27.6, and the strong market impulse is required for exceeding this level successfully.

The second one is at the level of $35, and LINK may require the support of the entire crypto market with the rapidly growing prices of other cryptocurrencies to exceed this level.

After exceeding both of these levels, investors can reliably open a long position with expectations of high returns within the following months (under the conditions of properly balancing their portfolios). 

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Dmytro Kharkov

Holding a Master’s Degree in Finance (Distinction), Dmytro Kharkov has proven expertise in Business Analytics, Data Analysis, and the crypto market. He has completed online courses on Machine Learning and Data Science from the leading universities and online schools. He closely monitors the latest crypto analytics insights from Glassnode, IntoTheBlock, Santiment, etc.