The Google of Crypto
Chainlink
Discover why Chainlink is revolutionizing the industry, driving institutional adoption, and shaping the decentralized future.
Here's my October 2023 research report on LINK.
Here's what we'll cover in today's edition:
Overview
Use Case
Adoption
Revenue
Tokenomics
Treasury
Governance
Team & Investors
Competitors
Risks & Audits
Summary
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Chainlink is a decentralised oracle network that connects smart contracts to the real world.
It's infrastructure is widely adopted and used for:
Price feeds
Data feeds
Proof of reserves
Smart contract automation
Verifiable on-chain randomness (VRF)
Chainlink is widely utilized across various industries, including:
Financial services
DeFi
Gaming
NFT collectibles
Climate markets
Enterprise
Insurance
It is among a handful of crypto projects that are critical for a robust and decentralized future.
The launch of CCIP has been a game-changer for Chainlink, enabling seamless transfer of data and value between existing systems and both public and private blockchains.
The adoption of CCIP continues to surge:
Base chain
ANZ/ SWIFT
Vodafone
DTCC
Affine Pass NFTs
The current Total Value Secured (TVS) using Chainlink oracles stands at $11.3b (across 348 protocols).
Chainlink is the dominant and most widely used oracle, capturing over 46% of the market share.
Other notable oracles in the space include WINkLink, Chronical, Pyth, and TWAP.
Chainlink accrues fees and rewards through several methods:
CCIP
Keepers
Requests
VRF V1
VRF V2
In the past 30d, Chainlink has generated:
$180k in fees
$111k in revenue
This places it at the top among other oracles and 71st overall according to DeFiLlama.
The $LINK token is used within the network for the following components:
Node operator fees
Implicit staking
Explicit staking
The recently released Chainlink 2.0 aims to create a new era of growth through:
Chainlink Staking
BUILD Program
SCALE Program
These are the current supply stats:
Circulating supply = 556.8m
Max supply = 1b
Market cap = $6.1b
FDV = $10.9b
Market cap/ FDV = 0.56
Chainlink has allocated team tokens, which make up 30% of the total supply, to fund development.
Based on current prices:
$72m $LINK
$800m USD
According to DefiLlama, this would position it as the fifth largest in terms of Treasury value.
A substantial war chest.
Governance is facilitated through validation, which monitors on-chain Oracle behavior and helps users choose oracles.
Chainlink products are also widely used by other DeFi projects to assist in their own decentralised governance.
The project was founded in 2014 by @SergeyNazarov and Steve Ellis.
Chainlink Labs has since expanded to employ over 400 individuals.
To date, the project has successfully raised $32M in funding through four rounds.
Chainlink is the market-leading oracle solution, enjoying a significant first-mover advantage and dominant market share (46% of TVS).
Considering the team's continuous growth and ecosystem development, I don't anticipate this changing anytime soon.
The codebase and smart contracts have undergone multiple audits throughout the years.
As per the CRC, Chainlink has been assigned a 2/5 rating in its securities framework.
A score of 1/5 indicates that it is least likely to be considered a security under the Howey test.
Overall, I am very bullish on $LINK and the Chainlink protocol.
There are a number of upcoming bullish catalysts:
CCIP
Chainlink staking
Economics 2.0
Institutional adoption
Ecosystem expanding
Market conditions improving
Overall weighted score = 8.78
Note: I am NOT an ambassador or advisor of Chainlink. This is NFA.