2021 was the year that decentralized finance (DeFi) truly took the cryptocurrency industry by storm, as several new protocols and trading platforms emerged on Ethereum-like Layer 1s. Another trend that could be seen emerging within the smart contract platforms upon which these applications are built was the integration with the decentralized oracle network, Chainlink.
The Chainlink network provides real-world data and information to on-chain smart contracts through the use of oracles. This includes payment methods, price feeds, and other events not native to the underlying blockchain.
Its many partnerships have made it one of the most integrated networks in the space, and its functionality is being utilized by not just L1s but also exchanges such as BitYArd and Kucoin and traditional asset managers like Gemini. In November last year, the network revealed that its total value secured through smart contracts had crossed $75 billion.
While Chainlink’s usability for blockchains is evident in its growing popularity, has it also aided in the success of their native tokens? Crypto enthusiast ‘Alpha’ believes it has, as they recently took to Twitter to highlight a correlation between Chainlink Oracle integration by blockchains and an increase in demand for their native tokens.
3/ Once developers get access to secure, decentralised oracles they are able to build their dApps more quickly; and in many cases, can only then release their dApps because they can trust the security of the Chainlink network.
— Alpha (@alpha_pls) January 16, 2022
Looking at the leading smart contract platform Ethereum, which hosts the largest amount of existing dApps and was the first to integrate Chainlink oracles, a correlation can’t directly be established. However, their importance can be witnessed in how large Ethereum-based market players utilize them.
While MakerDAO depends on its price feeds to determine the value of the underlying collateral backing the asset, stablecoin…
