Summary of the thesis
ChainLink (LINK-USD) is a unique blockchain that bridges crypto and the real world. Its unique approach to oracles makes it an excellent, great tool for smart contracts to securely facilitate value.
Given the initial rally We have seen in LINK I believe the following bull run could surpass LINK $80 giving this coin a 10x return potential.
ChainLink is the first decentralized network of oracles. An oracle is the software that allows external data to enter a blockchain.
As we know, blockchains are secure due to their decentralized and immutable nature. They allow anyone to participate on the blockchain and their data is continuously stored and validated.
However, blockchains run into a stumbling block when attempting to expand beyond their own network. This is usually done through smart contracts, which are applications that harness the power of the blockchain. But these applications sometimes rely on external data. Here oracles intervene and where ChainLink is changing the game.
Oracles are the vehicle through which external data is introduced into blockchains. But if these oracles themselves are not secure, security breaches can occur. Oracles are traditionally centralized, however ChainLink provides a network of decentralized oracles that connect off-chain data to on-chain smart contracts.
There are three key components how ChainLink works; On-chain oracles, off-chain oracles and the ChainLink node.
ChainLink’s on-chain oracles are smart contracts that connect requests for information to the corresponding off-chain oracles. These contracts are used to aggregate data, check the reputation of oracles, and match the right requests.
Off-chain oracles are the ones responsible for injecting information into the blockchain. They are the equivalent of validators/miners in other blockchains. These oracles use LINK to act as an oracle and receive LINK in return for providing that service. ChainLink keeps oracles honest by validating data against each other and penalizing oracles with the wrong data. It also sends requests for information to numerous auditors to ensure they are correct.
ChainLink is one of the most exciting blockchains because it really helps bring the utility of crypto to the real world, especially as we move towards a more connected economy through the development of the Internet of Things.
ChainLink has many different use cases thanks to the way it leverages real-world data.
In the world of DeFi, LINK enables the creation of secure smart contracts based on real-world data such as stock/crypto prices and yields. Granary is an example of this. A cross-chain lending platform using LINK.
Insurance is another use case for chain link. Blockchain technology can facilitate the handling of data that insurance companies need and ChainLink can provide accurate and timely information from the real world. Ensuro is doing just that.
And that’s also worth mentioning ChainLink can be used as a bridge between traditional systems and the blockchain. LINK can connect to any blockchain and it can be used by data providers, websites, networks, etc.
The LINK token is used as a reward to pay for LINK oracles. At the same time, these oracles must stake LINK to show their commitment to the network and be able to act as oracles.
The good thing about LINK is that its supply is capped at 1 billion tokens:
This makes LINK an ideal investment as it has a limited supply but serves a growing market with numerous use cases, meaning its demand should increase in the future.
At a basic level, LINK has some very interesting applications. On a technical level, too, I see signs that the price could explode soon.
Using Elliott Wave Theory, I predict that LINK could reach a price target above $80. The rally we saw in 2021 was wave 1 and we have now corrected in wave 2 which went down to the 88.7% retracement. In the last few weeks we have seen a strong reversal. Additionally, the weekly MACD has completed a bullish crossover and the RSI seems poised to move higher as well.
While such a rise seems extreme even for a cryptocurrency, keep in mind that there are compelling arguments beyond EWT that support this price target.
The global IoT market is projected to grow at an annual rate of 26.4% from here to 2029. If we assumed a similar growth rate ChainLink and translate that into the token’s price increase, then LINK could be worth around $80 at this point.
Also, we must consider the fact that LINK was already trading at almost $60 at the peak of the crypto bull market. If the crypto cycle makes another peak, LINK should be well above this level.
It may take a while with this technology, but the potential for high returns is there.
We have to consider that too While ChainLink is a leader in this space today, as this market grows, it has to contend with more competitors. At the moment there are other similar initiatives such as Band Protocol, API3 and WINKlink.
The future of cryptos is still unclear and we still don’t know what the market will be like in 10 years. However, one good thing about ChainLink is that it is compatible with any blockchain. Even if the dominant blockchains change, LINK will be able to interact with them and provide value.
ChainLink is one of the largest cryptocurrencies today, and with good reason. There are thousands of applications that use ChainLink every day. This blockchain really brings value to the real world, which I think makes it a strong contender to outperform in the upcoming crypto bull market.