Ultimate Resource On Chainlink And Other Oracle-Based Crypto-Currencies
Chainlink (LINK) has been on fire, blazing its own trail independent from the rest of the market. Ultimate Resource On Chainlink
The digital asset appears to be in the beginning stages of a strong uptrend on the charts, backed by a devoted community and several significant news headlines this year.
Chainlink’s recent price action is notable because of its timing and independence from the rest of the crypto market. Sentiment around Bitcoin (BTC) has been noticeably bearish since its fall from a multi-month consolidation pattern on Sept. 24. Bitcoin is firmly positioned as the crypto market’s leading asset, meaning that overall market sentiment has been correspondingly bearish.
Additionally, altcoins often move together in price, depending on Bitcoin’s price and sentiment.
Seeing the top market leaders, such as Ether and XRP, trend upward together is not out of the ordinary, especially if Bitcoin’s price also rises at the same time. Most altcoins, if they are moving at all, are currently fluctuating in step with Bitcoin. Chainlink, however, has had a mind of its own lately, acting as an outlier and providing hope that altcoins may have a future after all.
Daily LINK Price Chart
Paired against Tether (USDT), Chainlink shows significant strength as it fights through a block of resistance between $2.52 and $2.75. So far, the asset has reached an Oct. 8 high of $2.65, sitting at $2.55 at press time.
Just a few weeks before LINK posted its all-time price high of $4.59 in June 2019, Chainlink announced a collaboration with Google Cloud amid an overall bullish cryptocurrency market. Sentiment for Chainlink has been on the rise since the announcement.
LINK posted a very nice bottoming pattern through September, entering October with strength. The token also saw a healthy correction between Oct. 2 and Oct. 6, providing rationale for a more sustainable uptrend than if the asset painted 14 green days in a row.
If LINK breaks past $2.75, it faces resistance at $3.25, $3.75 and $4.59, the asset’s all-time price high set on June 29, 2019. Past $4.59, the asset would enter price discovery mode, facing no historical resistance.
Interestingly, Chainlink’s all-time high did not occur during crypto’s most recent altseason in Jan. 2018, when almost every cryptocurrency other than Bitcoin rose tremendously in price over a period of weeks. LINK only tapped a high of $1.39 back then.
Chainlink’s all-time high came on June 29, 2019, three days after Bitcoin posted its yearly high of $13,878 on June 26. LINK has since decoupled from Bitcoin’s price movements, setting a trend of its own, a rare occurrence in the cryptocurrency space.
Currently on its third consecutive green daily candle, LINK could see a pullback, cooling the token down before another leg up.
If pullback occurs, the 100-day moving average (MA) sits at $2.26, which already held as support when price wicked down to it earlier today. In the case of a more significant correction, LINK’s 200-day MA lies at $1.62.
In contrast, Bitcoin has tried to regain its 200-day moving average as support several times since its Sept. 24 drop, but has failed each time.
Chainlink’s 0.5, 0.618, 0.705 and 0.786 Fibonacci levels might also prove significant if the asset corrects from a local high of $2.65. Those Fibonacci points occur at $2.06, $1.92, $1.82 and $1.72 respectively.
Additionally, LINK has support at its most recent bottom, around $1.54.
Ether’s Role In The Altseason Equation
Historically, the crypto market’s largest altcoin, Ether, has sometimes led the charge in terms of altseason — or at least renewed altcoin strength.
Paired against the U.S. dollar, Ether’s daily chart looks similar to LINK’s chart during its bottoming pattern several weeks ago. The past few weeks have provided what looks to be the beginning of an uptrend for Ether.
In contrast to Chainlink, however, Ether has a more difficult road ahead. At press time, Ether fights a level of resistance at $181. The coin also needs to defeat its next closest levels of resistance at $205 and $231.
Ether recently suffered a bearish moving average cross, seeing its 100-day MA cross under its 200-day MA. Those key moving averages also sit above Ether’s price as resistance, between $208 and $211.
Ether Priced Against BTC
Ether shows further strength when priced against Bitcoin, which may be a key factor in showing altcoin optimism.
Paired against BTC, Ether shows a trend that is further along than its USD counterpart. Ether has already regained the 100-day MA and flipped the 0.0219 level from resistance to support.
By comparison, however, Ether’s BTC pairing fell further than its USD pairing, leaving more ground to make up in its journey to recovery. Ether also recently faced rejection from resistance at 0.0223.
Still, Ether looks to have turned a page, at least for now.
Chainlink Partners with Chilliz to Automatically Mint Tokens for Teams Like FC Barcelona
Ethereum-based sports tokenization platform Chilliz (CHZ) has partnered with blockchain platform Chainlink to allow for real-time non-fungible token (NFT) creation.
According to a Mar. 4 announcement from Chilliz, the platform plans to leverage Chainlink’s capacity to trigger the execution of smart contracts based on real-world data and events. This feature will allow the minting of NFTs for partners in real-time, based on data securely provided by Chainlink’s network.
This integration will allow Chilliz to create NFTs that react to the real world and mint limited edition collectibles to commemorate real-time events. The company explains that, for instance, it would be possible to mint tokens when a soccer player scores a hat-trick during a game.
The Leading Blockchain Sports Platform
As the announcement points out, Chilliz is a sports tokenization platform that has already signed deals with major football clubs FC Barcelona, Juventus, Paris Saint-Germain, Atlético de Madrid, Galatasaray, A.S. Roma, CA Independiente, West Ham. Furthermore, the firm is also targeting 50 more partners in sports, esports and entertainment this year.
In February, Chiliz has partnered with major marketing agency Lagardere Sports and Entertainment. This partnership can potentially lead to American sports fans using blockchain-based tokens to interact with their favorite teams. Also in February, Chilliz announced the launch of an integrated membership and fiat-crypto prepaid debit card, which also provides blockchain-based global ID functionality.
Chainlink (LINK) Rallies 149% Since March Bitcoin Price Crash
This week Chainlink (LINK) is on an absolute tear, gaining 47% over the past four days on strong purchasing volume. The price had dropped by a massive 63.50% from March 11 to March 12 and bottomed at $1.35 on March 13. Since March 13 LINK has rallied 149% and at the time of writing the digital asset was up 6.65% for the day.
Other than the entire crypto market recovering from deeply oversold conditions, the recent announcement of new partnerships with decentralized finance giant Celsius, and Fantom could possibly be adding to the current excitement as previous partnership announcements have been known to drive LINK price higher.
Regardless of the reason, the recent gains are quite impressive and the current state of the daily chart suggests that there could be more to come. After LINK broke from the $1.99 – $2.30 range the price took off, clearing the volume profile visible range high volume node and rapidly reclaiming lost ground from the March 11-12 drop from $4.10 to $1.33.
The swift drop on March 12 basically led to the price slicing through all key supports in one candle so traders will note that the consolidation that occurred on March 19 through April 5 matches the same price action from December 18 – January 13 when LINK traded in the same price range.
Today the price stopped right at $3.47, a point which previously served as support on Feb. 27 andFeb 25. If LINK is able to reclaim $3.47 as support, further gains to the 23.6% Fibonacci retracement at $4.13 will be the next step traders anticipate.
Above $4.13, the next target is $4.57, a bit closer to the all-time high and although the current move is looking over-extended, it’s foolish to doubt the wiles of the LINK marines.
In the event of a brief pullback, the price could drop to $2.89, which is right above the 61.8% Fibonacci retracement and a high volume node on the VPVR. If the $2.89 – $2.58 range fails to provide support then a full retrace of the most recent 47% gain could occur as the price drops back to $2.26.
While all looks good on the daily time frame, the 4-hour chart suggests the altcoin is losing a bit of momentum as the moving average convergence divergence begins to roll over toward the signal line. The relative strength index has also dropped from bullish territory to 66.
For the time being, traders of the LINK/USDT pair should keep an eye on purchasing volume and whether or not the price bounces on the 50% Fibonacci retracement at $3.17.
The LINK/BTC pair has also rallied fairly well since the March 13 crash. Currently the pair is up 38% off its bottom at 0.00032963 satoshis. Similar to the USDT pair, LINK/BTC price surged higher after breaking above the high volume node at 0.00035111 sats.
LINK has already pulled back to the support at 0.00043891 sats after topping out at 0.00047347 sats and if the 61.8% Fibonacci retracement (0.00042061 sats) level fails to hold as support then the price could drop to 0.00038941 sats.
Like the LINK/USDT pair, the MACD is rolling over but sell volume has also decreased, suggesting that some traders took profits. The RSI has also dropped from overbought conditions and currently in a sharp descent at 72.
As suggested for the LINK/USDT pair, traders of the LINK/BTC pair should also keep an eye on volume and whether or not the price bounces off the 61.8% Fibonacci retracement at 0.00042061 sats.
Trust No Dapp: Chainlink Launches Oracle For Provable Randomness
Chainlink may be solving part of the problem that first drove Ethereum co-founder Vitalik Buterin’s interest in decentralized applications.
“One day [‘World of Warcraft’ game maker] Blizzard removed the damage component from my beloved warlock’s Siphon Life spell. I cried myself to sleep, and on that day I realized what horrors centralized services can bring. I soon decided to quit,” Buterin wrote.
Similarly, Chainlink is rolling out its Verifiable Random Function (VRF) service, where subscribers can gain access to provably random values needed for demonstrating the integrity of smart-contract-based projects such as online games. With Chainlink VRF, you know an application hasn’t been tampered with – all via the blockchain.
Chainlink co-founder Sergey Nazarov announced the new product Monday at Consensus: Distributed.
“A lot of applications can’t exist in a trustless way without randomness,” Nazarov said in an interview.
In short, smart contracts will send a seed to a Chainlink oracle which will generate a random number using Chainlink’s VRF.
The resulting number, broadcast back to the application, can be verified as random based on the oracle’s public key and application’s seed, Chainlink said in a blog post.
Oracles partaking in the system will be paid in user fees, Nazarov said, in an attempt to create an internal token economy for data information and security.
Verifiably randomness is novel service because of the difficulties of getting it right, Nazarov said. Many applications – particularly for gaming – need sources of randomness to create fair systems of play. Proving that the vehicle for selecting randomness has not been manipulated by the originator or an outside adversary is no easy task, however.
Decentralized finance (DeFi) lottery PoolTogether is the first subscriber to Chainlink’s VRF. The savings tool pools interest accrued on dai stablecoin holdings into one pot, and picks a lucky winner every week.
PoolTogether will now switch from its centralized randomness selection method to Chainlink’s VRF for decentralized randomness.
“Even seemingly random values, such as a blockhash, can be manipulated by malicious miners attempting to extract value from applications like PoolTogether,” the project’s co-founder, Leighton Cusack, said in a blog post. “This is why we’re excited about a verifiable form of randomness that can be verified using a blockchain’s highly trustworthy signature verification capabilities.”
Chainlink’s Nazarov said the randomness question for protocols is truly a computer science conundrum, one that is most easily addressed through a third-party solution such as Chainlink.
“What we are trying to address is people building applications, not just tokens,” Nazarov said.
Chainlink’s decentralized price oracles will be used as an “anchor” by the forthcoming derivatives exchange Digitex Futures to protect traders against slippage.
Forthcoming Seychelles-based crypto derivatives trading exchange Digitex Futures has announced it will integrate Chainlink’s (LINK) decentralized price reference contracts on its platform.
Chainlink’s decentralized price oracles are typically utilized by decentralized finance (DeFi) applications.
With the integration, Digitex claims to comprise the first centralized crypto futures exchange to decentralized oracles. The integration will be used as an anchor to detect internal deviations over a defined percentage.
Chainlink describes its price feeds as “security reviewed, sybil resistant, fully independent.” The index is informed by “a variety of trusted spot market sources.”
Digitex Integrates Decentralized Price Feed
Digitex asserts that the price reference contracts provide traders “with strong protection against price manipulation,” and “overexpos[ure] to slippage” should the firm’s internal index produce extreme fluctuations.
The contracts will be used to support Digitex’s initial Bitcoin (BTC)/U.S. dollar perpetual contracts, before incorporating additional feeds alongside other crypto assets in the future.
Adam Todd, the founder and chief executive of Digitex, stated that “Chainlink provides Digitex with highly reliable and transparent price feeds that protect our users against the negative outcomes of abnormal market conditions or internal complications.”
Digitex’s futures exchange opened on mainnet to selective user onboarding at the end of April. The platform currently plans to publicly launch during summer.
Competition Grows Between Defi Price Oracles
At the end of April, it was announced that leading Tezos (XTZ) developer teams Cryptonomic and SmartPy had begun working to bring Chainlink’s price oracles to the Tezos network.
The move followed Coinbase’s launch of its own price oracle for the DeFi ecosystem.
Sequoia-Backed Band Protocol Creeps Onto Chainlink’s Turf With Oracle Product
Another sprinter has entered the cryptocurrency oracle race, this one backed by Sequoia Capital and Binance.
Band Protocol 2.0 launched Wednesday with its mainnet oracle solution, BandChain, leveraging the Cosmos SDK, according to a release from the firm. The project’s revamp comes 10 months after listing as an initial exchange offering (IEO) on Binance Launchpad and a $3 million 2019 seed round led by Sequoia India.
“Band Protocol is launching at a momentous time with the Inter-Blockchain Communication (IBC) protocol stabilizing,” Zaki Manian, director of Tendermint Labs, said in a statement. “There will soon be a network of chains who can take advantage of the flexible data script and real-time data requests enabled on the BandChain mainnet.”
The technical ability to place real-world data onto a blockchain network is alluring though still very much in question. To date, Chainlink has dominated the oracle space, nabbing integrations with scores of crypto projects, but others are rushing in with competing visions.
Initially run on the Ethereum blockchain, Band Protocol built out its own blockchain on Cosmos technology to sidestep congestion concerns, co-founder and CEO Soravis Srinawakoon told CoinDesk in an interview.
As previously reported by CoinDesk, Band Protocol first launched in 2017 with the intention of tackling, among other things, “fake news” through a tokenized oracle platform. The Thailand-based team also launched a decentralized trading app, BitSwing, in October 2019.
The firm’s new offering, BandChain, will launch in three successive stages including the on-boarding of community, professional and ecosystem partners as validators, the release states.
Decentralized price feeds provide information by querying multiple off- and on-chain sources such as, in BandChain’s case, a Bloomberg price feed. Data accuracy is assured by validators staking the network token, BAND, as collateral.
Data pulled from on-chain sources has its drawbacks, however.
The Oracle Race
Blockchains are notoriously slow and are prone to transaction bottlenecking when multiple users are competing to execute transactions at the same time. For products depending on oracle solutions, the problem is compounded: decentralized applications (dapps) are dependent on oracles to execute transactions which are then dependent on the underlying blockchain.
If that blockchain cannot execute the order for the oracle, then dapps cannot execute their transactions either. This most recently came to a head on March 12’s “Black Thursday,” where overwhelming sell pressure from the plummeting price of ether (ETH) caused a cascade of technical failures, including momentary operational lapses for both Maker’s V2 oracles and Chainlink.
Srinawakoon said Cosmos’ underlying tech prevents on-chain congestion – and therefore transaction failure – by grouping transactions together in a way Ethereum cannot currently do.
The team chose to build on Cosmos over Polkadot, another interoperability project, because Polkadot has yet to fully launch, as well as perceived costs, Srinawakoon said.
“For Polkadot, you don’t have to spin your own chain. So there’s a benefit, but the drawback is it’s quite expensive for any blocks to happen because you can think of it as [if] you need to rent a space on top of Polkadot,” Srinawakoon said.
BandChain is focused on multiple products outside of decentralized finance (DeFi) as well, Srinawakoon said, including stock and commodity prices, verifiable random number generation and sports betting, the firm said.
Chainlink’s price oracles are quickly emerging as the industry-standard data source for the DeFi sector, with top project Kyber Network integrating the price feeds for its token swaps.
Chainlink’s price oracles are continuing to see widespread adoption among decentralized finance, or DeFI, protocols, with Kyber Network (KNC) integrating the price feeds on its KyberSwap token swap service on June 12.
KyberSwap is at least the third DeFi platform to integrate Chainlink’s price data this month, signposting Chainlink’s increasing dominance over the niche market.
Price references displayed for token swaps on the platform now derive from both Kyber Network’s native feeds and Chainlinks oracles.
KyberSwap Integrates Chainlink’s Price Data
A blog post published by KyberSwap describes the integration as protecting users executing token swaps from slippage while safeguarding against price manipulation.
“KyberSwap is glad to work with a reputable project like Chainlink and its decentralized oracle network to provide reliable price feeds for our non-custodial token swap platform and improve the overall trader experience,” said KyberSwap’s head of product, Sunny Jain.
“We’re excited to integrate Chainlink Price Reference Data with KyberSwap to bring more security and reliability to the price feeds their traders rely on for calculating slippage,” said Johann Eid, product manager at Chainlink.
Chainlink Price Oracles Dominate DeFi
Chainlink’s price feeds are quickly becoming the industry-standard of the DeFi sector, with at least three decentralized finance projects incorporating the company’s data in June so far.
On June 2, AVA announced it had begun integrating Chainlink’s feeds to make the price data available to developers building applications on the AVA network ahead of its mainnet launch this season.
Speaking to Cointelegraph, AVA Labs co-founder Kevin Sekniqi stated: “Chainlink provides access to the feeds of financial data and real-world information necessary to build new financial instruments and the next wave of decentralized finance.”
“When you look at the outstanding growth of Ethereum’s DeFi community, it’s clear just how important powerful oracles can be when deployed by talented developers.”
The following day, Ethereum (ETH)-powered decentralized exchange Opium also rolled out support for Chainlink’s price data alongside launch on mainnet.
Chainlink Expected To Spend $25M More On Development Than Ethereum
According to the latest report from Flipside Crypto, Chainlink is expected to spend $20 million more than Ethereum on ecosystem development this year.
According to the latest report from Flipside Crypto, Chainlink is spending one million LINKs a month rewarding node operators, outspending Ethereum by a wide margin.
Chainlink’s Aggressive Expansion
The researchers observed that 500,000 Chainlink (LINK) are sent to node operators twice a month.
Flows Of LINK Tokens Within The Crypto Ecosystem
At current prices, this support constitutes almost $5 million dollars a month or close to $60 million annually. At the same time, the Ethereum Foundation is expected to spend $30 million this year.
Meanwhile, Ether’s (ETH) market capitalization is roughly 15 times that of Chainlink.
This aggressive spending has allowed the company to achieve key milestones such as an integration with China’s Blockchain Service Network and Tezos (XTZ) and the introduction of verifiable on-chain randomness.
This has also allowed LINK to trade close to its all-time high. Recently, a co-founder of Framework Venture, Michael Anderson, said that he expects the price of LINK to exceed $25 in the foreseeable future.
$16 Billion Node Incentivization Fund
Chainlink’s ICO raised $32 million back in September 2017. The total supply is one billion tokens with 35% distributed during the token sale. Another 30% was reserved for the company for continued development and the remaining 35% for the incentivization of node operators.
The “Node Operator” wallet containing 350 million LINK remains intact. The outflows are coming from a wallet that originally contained 50 million tokens, it has over 31 million LINK remaining.
There is another similar wallet, which also started with 50 million LINK and has had regular outflows. Some 37 million LINK remain in that wallet. Both wallets are identified by Glassnode as team wallets. The latter wallet had regular outflows of 700,000 LINK throughout 2019.
If these payments are indeed going to node operators, it is not clear why they are not coming from the wallet containing 350 million LINKs. Though all wallet attributions are hypothetical since this information is not coming directly from Chainlink.
Apparently, there is no segmentation between company’s wallets and team’s wallets.
However, assuming that the two wallets belong to the Chainlink Foundation, at least 31,509,569 LINK have been spent on Chainlink’s development thus far. At the current price, this represents about $150 million.
Chainlink declined our request for comment.
Speculation And Greater Decentralization
The report also observes that, although most of the token supply is still used for speculation, the project has a very active community and is becoming increasingly decentralized:
“Chainlink has a very engaged community. The fact that more users are accumulating LINK, points to a very healthy ecosystem that is becoming increasingly decentralized and active. Our benchmarks, which compare Chainlink’s data to over 40 other blockchains we monitor, place Chainlink far above others in terms of the median number of unique addresses active daily on the network.”
Chainlink’s expansive strategy has been paying off. It has achieved tangible results from key integrations to high market capitalization. Perhaps its most impressive achievement is that Chainlink has become synonymous with crypto oracles.
Chainlink Price Hits A New All-Time High — Will Tezos (XTZ) Follow?
Tezos price looks ripe to follow in Chainlink’s footsteps for a massive rally and even new all-time highs given the correlation of these two cryptocurrencies.
Altcoins have been taking the spotlight as massive surges are seen across the board. Some have been making 1,000% moves or more as Aave (LEND) and Zilliqa (ZIL), for example. Others are slowly waking up out of the ashes, and some are printing new all-time highs.
One of those recent all-time highs is Chainlink (LINK), as Chainlink’s price broke above $5 for the first time ever. Once Chainlink moves, Tezos (XTZ) follows. Will it be the same this time?
Chainlink (LINK) Becomes The ‘Tesla’ of Cryptocurrency — What’s Next?
Chainlink overshot the previous bullish target hitting a new all-time high of $8.40, but how much higher can LINK price really go?.
As Bitcoin (BTC) price continues to trade in a tightening range, the altcoin market has been pushing higher each week, and the most recent surge has come from Chainlink (LINK).
After breaking above the $5 level, LINK price surged nearly 100% in a matter of days and ended by making a new all-time high at $8.40. Through this massive push, LINK surpassed EOS (EOS) and Crypto.com (CRO) to claim a spot among the top-ten cryptocurrencies listed on CoinMarketCap.
Investors are now curious to see if Tezos (XTZ) will continue to follow LINK and there are expectations that other altcoins will also follow LINK’s upward trajectory.
What Pushed Link Price To $8.50?
LINK has proven to be one of the strongest movers in the cryptocurrency markets of recent years. This was proved once again as the cryptocurrency broke above the previous all-time high of $5 and surged with 85% towards $8.50.
In the previous article, a target of $7.00-$7.25 was established using the Fibonacci extension tool. However, LINK overshot that target by a mile.
As the chart shows, the rally might be temporarily over, as sellers are stepping in but this will only be confirmed if the daily candle closes as shown on the chart above. Currently, the candle shows a giant wick on the upside, indicating that there’s more sell than buy pressure.
Aside from the candle, such a giant move is due for a corrective move, so it is good to review the levels to watch for potential support.
The 1-day chart is showing clear support levels. One of them is found between $6-$6.50. The previous resistance at $6.57 can be confirmed as support, which would suit a renewed test of the $8.50 resistance level.
However, a clearer signal would be a corrective move towards the $5 level, as that used to be a significant resistance zone before the massive breakout occurred.
The 4-hour chart shows a bright support/resistance flip of the $5.70 level, which caused continuation and the price to accelerate towards $8.50.
The most likely scenario is a test of the previous high for support. In this case, the $6.50-$6.60 level. A potential wick towards the $6.20 level is an area to watch for.
If this zone holds, a renewed test of the highs at $8.50 is likely to occur. If the $6.50 level is lost, further downward pressure is likely to occur on the markets with a potential retest of the $5 level.
LINK/BTC Pair Breaks Out
The LINK/BTC pair shows a massive breakout as well. The resistance zone at 0.00055000 sats was tested several times before the breakout occurred.
This price action is actually quite similar to the resistance zone of Bitcoin that is encountering at $10,000-$10,500. As the saying goes, the more often a resistance gets tested, the weaker it becomes.
In the case of Bitcoin, the resistance zone at $10,000-$10,500 has been a tough area to surmount for a year already and for LINK the 0.00055000 sats barrier has been a resistance zone for seven months.
As the breakthrough of the resistance zone occurred, massive acceleration took place but the chart is showing signs of overextension on the upside. For this reason a corrective motion is likely to occur.
In that case, the potential levels of interest should be the previous resistance at 0.00055000 sats and the area between 0.00065000-0.00066500 sats.
When Chainlink Moves, Tezos Follows
Once Chainlink moves Tezos tends to follow. However, in the previous months, Tezos has been lagging heavily but the price finally made a strong move over the weekend.
XTZ/USDT has been showing strength in the previous days and currently faces the final hurdle before a new all-time high.
The pair secured support at the $2.40 level before continuation and acceleration towards $3 occurred. The next step to watch for is a test of the $2.70-$2.77 level for support.
If that level sustains support, it’s likely that XTZ/USDT will break through the $3 barrier and test the all-time high.
The $3 resistance area has been tested three times now and it’s possible that another test of the resistance zone will see the price finally push through it.
If XTZ/USDT breaks above $3, it’s assumed we’ll start accelerating and get a similar move to Chainlink. And that similar move means a new all-time high.
XTZ/BTC Breaks Above The 100-Day Moving Average
The XTZ/BTC pair is also showing strength as it recently broke above the 100-day MA. This is also the case with the XTZ/USDT pair. If the previous resistance area at 0.00002900-0.00002950 sats continues to hold for support, a support/resistance flip will be achieved.
Once this support/resistance flip is confirmed, continuation to the upside is likely to occur and traders will set their targets around the all-time high zone around 0.00003700-0.00003800 sats.
If Tezos manages to break through the all-time high levels, the sky’s the limit and savvy traders can look to the Fibonacci extensions in order to determine new targets.
Chainlink Integrates With Social Network Led by Distributed Computing Pioneer
An alternative social networking platform that aims to give users control over their data is integrating Chainlink data oracles.
Revolution Populi, a social network led by David Gelernter — a futurist and a distributed computing pioneer — is integrating Chainlink data oracles.
Revolution Populi is trying to displace Facebook by creating a social network where users can post and share information about their lives, “but advertisers pay them, not Facebook.” The network is just the first of many distributed apps that the company plans to release in the near future.
A Futurist Who Predicted Social Networks And Became A Unabomber Target
The idea in itself does not sound novel, as there have been quite a few projects in the crypto space that have tried to return data ownership to users. However, perhaps the most interesting aspect of the project is that Gelernter serves as a chief visionary officer.
Gelernter first made a name for himself in the 1980s through his contributions to the field of parallel computing. Later, in 1991, he published the book Mirror Worlds, which foreshadowed the development of the World Wide Web, including the social networking phenomenon. The acclaim likely attracted the unwanted attention of Ted Kaczynski, aka the Unabomber. On June 24, 1993, Gelernter was severely injured when opening a package filled with explosives.
Three Legs Of The Stool
The company’s CEO, Rob Rosenthal, told Cointelegraph that the social network is just one of the three legs of the stool they are building:
“It’s obnoxious enough that they take our sovereign property, sell it and keep all the money. But there are much bigger problems out there as a result. I mean, it is the public square. They do control everything on this public square. As you’ve mentioned, the data resides in their private database. […] We have a solution that we’re calling a three legged stool approach. It is not just a social net, by the way. It’s an ecosystem.”
The other two legs are the decentralized database, which will be structured as a decentralized autonomous organization, or DAO, and the third leg is the exchange or market for data.
The company will purportedly unveil its own blockchain in the coming weeks, which will serve as the backbone for the “stool.” Rosenthal was also quick to emphasize that Gelernter is actively involved in the day-to-day activities of the company. In fact, he designed the user interface for the social networking app.
A New Realm For Chainlink
Rosenthal believes that the Chainlink integration does not just provide a necessary layer to his project, but can help the oracle provider broaden its horizons:
“I think they’ve gotten unfairly typecast and the DiFi world. I think their technology can be spread to other projects such as ours that are more broad based and more ecosystem based. I’ve spoken to the guys, I believe that they’re pretty excited about this integration, because it brings them into kind of another realm.”
Breaking away with the recent trend, Revolution Populi plans to conduct an initial coin offering in the fourth quarter of this year. Rosenthal did not want to divulge many details, but he noted that it will be fully compliant.
Recently, Chainlink’s LINK token has been setting new highs on the strength of several partnerships and integrations.
3 Key On-Chain Metrics May Explain Chainlink’s Meteoric Rise
1,500% growth in the number of active addresses and a few other key indicators may explain the metric rise of Chainlink’s LINK token in 2020.
The price of Chainlink’s LINK token has increased 480% since the beginning of 2020/ These three key metrics may explain its rise.
Is It Another Pump?
Chainlink has been in the news a lot over the past several months with a number of partnerships and integrations. However, whenever a cryptocurrency or a token experiences rapid appreciation, the crypto community begins to speculate about the underlying causes. Typically, the most popular explanation is that the company behind the asset must be “pumping” it. We decided to look at some key on-chain metrics for the LINK token to determine whether those can explain the asset’s growth.
Number Of Active Addresses Up 1,500%
Here we examine three key metrics: number of active addresses, number of addresses with non-zero balance, and the number of LINKs circulating on exchanges. The number of active addresses has increased from 970 on January 1 to 14,255 on July 13 — almost a 1,500% growth. During the same time frame, the number of addresses with non-zero balances has doubled, while the number of LINKs stored on exchanges has decreased by 14 million or 16%. The latter corresponds with a recent report by Flipside Crypto that concluded: “Chainlink has a very engaged community. The fact is that more users are accumulating LINK.”
There are two bonus observations to consider as well. Over half of LINK’s circulating supply is held in smart contracts. Recently, Michael Anderson, co-founder at Framework Ventures opined that the one of the major reasons for the price spike is “the project’s scaled usage in the DeFi space”.
Although we cannot definitively dismiss the popular trope of this being another “pump and dump” scheme, on-chain data suggests that increased usage of the LINK token and overall growth of the Chainlink ecosystem are among the reasons for LINK’s meteoric rise.
Dubious Asset Manager Claims To Short Chainlink With 99% Target
A suspicious asset manager is claiming to have entered into a short position targeting a 99% crash in the price of Chainlink.
A report authored by Zeus Capital has asserted that the firm is building into a Chainlink (LINK) short position with a target of 99% gains, describing the top-10 cryptocurrency by market cap as “crypto’s Wirecard.”
With the report offering no citations and featuring zero working links, many analysts believe that it was authored maliciously.
The purported asset management and research firm claims to be based in New York, London, Singapore, and Hong Kong, however, Cointelegraph was unable to contact the firm — with the phone number for its London office appearing to be switched off, and the Hong Kong office diverting calls straight to voicemail.
One Redditor Dubiously Claims To Have Spoken To The Firm, Writing:
“I actually called the phone numbers cause I was not sure about this Zeus Capital. Anyway, had a talk of over 30 mins with them: They are short They are legit Their concerns are well meant. Looks like LINK soon will be going down. I would not buy LINK above $2.”
The firm also has the same name as the UK-based wealth manager ‘ZeusCapital.co.uk,’ and should not be confused with the United Kingdom-based company.
LINK Surges Into New All-Time Highs
The report, titled ‘The Coinlink Fraud Exposed,’ predicts that LINK will plummet from $7.95 to $0.07 over an unidentified timeline.
Zeus describes Chainlink’s development team as “very small” and “inexperienced,” asserting that on-chain activity is declining while competing protocols proliferate. Further, it accuses Chainlink’s executives of insider trading, market manipulation, and distributing false and misleading information.
LINK broke into new all-time highs above $5 earlier this month gaining more than 50% in one week.
Nexo Finance Accused of Being Behind Zeus Capital And Chainlink Short
Twitter users accuse Nexo Finance of being behind Zeus Capital, the firm who wanted to short Chainlink.
Nexo Finance has been accused of being behind the suspicious asset management firm that sought to short Chainlink (LINK) after social media users saw Zeus Capital’s source code pointing to its website.
Twitter users found a connection between Zeus Capital, who days ago called Link “crypto’s Wirecard,” and Nexo Finance on the Zeus Capital website. Embedded within the Zeus website source code were several instances of Typeform links connected to Nexo’s website. Typeform, which lets users create forms, is also used by Nexo on its own site to let users sign up for their newsletter.
Other users questioned if Nexo’s head of digital asset research Simeon Rusanov was involved in shorting LINK attaching images that could point to some involvement. This has been strongly denied by Nexo on its Telegram channel.
Zeus Capital released a report announcing it will short LINK with a target of 99% gains. The report, however, featured no citations and no working links. Analysts believed the report was authored maliciously. Cointelegraph attempted to contact Zeus Capital but its phone number in London was disconnected and its Hong Kong office diverted to voicemail.
In its Telegram channel, Nexo said the accusations that it’s behind Zeus Capital is “a cheap attempt at Chainlink’s and Nexo’s joint efforts and good work.”
“Nexo had nothing to do with this and its author is trying to insinuate such a connection through false flag stuff that Nexo is somehow involved. The most probable explanation is that we are Chainlink’s mosy recent partnership, we have staff who are well versed on the Chainlink subject, and because our OTC desks deals in LINK.”
The company admitted the Typeform link is indeed theirs but noted the same link has been used by its team for different marketing purposes and can be easily accessed by anyone and copied. Nexo also asked people to stop harassing Rusanov.
LINK surged 370% year-to-date and is now the ninth-largest crypto by market cap though some critics argue its strong increase may be a speculative bubble and a correction may be coming.
Chainlink Utility Drives LINK Price, But A Correction Could Be Coming
The growing utilization of Chainlink oracles in DeFi protocols has seen LINK’s token price rise considerably, but is a significant decline looming?
Chainlink’s token, LINK, is once again among the most talked-about altcoins, having surged over 370% year-to-date. In July alone, the now ninth-largest crypto by market cap has gained close to 80%, with blockchain analytics firm Santiment identifying LINK as its top-ranked emerging cryptocurrency.
Amid the price gains for LINK has come talk of a new altseason, especially for altcoins related to the currently booming decentralized finance market. As the DeFi market continues to experience significant growth, the need for decentralized oracles for smart contract protocols, like the type offered by Chainlink, becomes even more important.
On the opposite side of the conversation, critics argue that LINK’s price surge is only a speculative bubble driven by fear of missing out. Despite the growing utility for Chainlink’s oracle solutions, some pundits point to DeFi protocols developing their own in-house oracles as being the death knell for Chainlink utility.
With Bitcoin (BTC) continuing on its range-bound trajectory, some commentators say altcoin tokens might be primed to deliver significant gains. Since peaking at 67% in mid-May, BTC has seen its market capitalization dominance dip slightly, owing to the price gains experienced by several major altcoin tokens.
How Chainlink Works
A blockchain as a self-contained network should, in theory, offer robust immutability, which makes data manipulation difficult.
To alter records stored in a decentralized ledger, a rogue actor would need a large amount of computing power. Since the novel tech emerged with the creation of Bitcoin over a decade ago, several other networks have come online offering different functionalities. Nowadays, it is common to see organizations, and even governments, talk about creating blockchain-based solutions for their operations.
Whether these blockchains have any technical merit is a discussion for another time. Assuming they do, their implied decentralization only exists within their network boundaries in isolation. Any interaction with data from another blockchain or “real-world” service often requires a centralized “middleware.” Tainted data from these third-party sources effectively nullifies the fidelity of the blockchain’s data.
Thus, the idea of centralized oracles does not tally with the decentralized ethos of blockchain functionality. Oracles are intermediaries that translate data from off-chain sources to on-chain smart contracts and vice versa.
Chainlink is one of such projects that facilitates the secure and trustworthy decentralization of oracles via a network of nodes tasked with providing accurate information for on-chain smart contracts. Chainlink’s decentralized oracle consists of data purchasers and provides the former with requesting information and the latter acting as providers of secure data. Instead of communicating with centralized services for outside data, blockchain networks need only interact with Chainlink oracles.
Providers stake LINK — the native token of the Chainlink network — to bid on information requests made by purchasers.
When a data purchaser submits a query for something like the weather forecast, for example, the Chainlink protocol registers this query as an “event,” creating a service level agreement. The SLA proceeds via three basic sub-smart contracts: a reputation contract, an order-matching contract and an aggregating contract.
The reputation contract tracks oracle metrics, while the order-matching contract examines the bids from participant nodes based on the parameters defined by the data purchaser. In the final step of the SLA, the aggregation contract collates the information provided by the nodes to determine which is best suited to satisfy the event. Thus, the aggregation contract involves three major steps — selecting the best oracle, reporting the data and result collation. Data from the aggregation contract also provides updated oracle metrics for future queries.
The DeFi Connection
Back in mid-June, Cointelegraph reported that Chainlink price oracles were dominating the DeFi space with protocols like Kyber Network integrating Chainlink price data into its token swap market. For an emerging crypto market sector like DeFi, Chainlink should, in theory, offer enhanced connectivity, trusted price data, increased computational ability and robust privacy. Given the broad applicability of the DeFi sector, decentralized oracle services are a must-have with some projects having already developed their own in-house solutions.
Indeed, access to secure and trusted off-chain data is often the bane of many decentralized applications. DeFi applications can hardly function on data available on their native chains alone and often require access to enterprise systems, web APIs and payment systems, among others. DeFi protocols work by way of smart contract execution whose settlement depends largely on several types of off-chain data. Chainlink oracles provide access to these enterprise backend systems to help run the DeFi projects.
By interfacing with several DeFi protocols, oracle networks like Chainlink can also deliver customized data sets like aggregated price indices for major cryptos like BTC, Ether (ETH) and Tether (USDT). Instead of DeFi lending or a money market creating and maintaining price feeds that require constant updates, protocols can interface with these decentralized price oracles.
Data computation is also another problem for DeFi protocols and DApps, in general. Any process that requires input from two or more nodes or oracles means multiple gas fees that will negatively impact the network’s practicality. Decentralized oracle networks like Chainlink should, in theory, offer low-cost data computation via pathways like threshold signatures, which should limit the gas cost for transactions. Part of this low-cost data computation occurs off-chain within trusted hardware that allows nodes to operate in a “black box ecosystem.” Reducing the volume of on-chain transactions while still maintaining security protocols is one of the ways of boosting blockchain scalability.
On the privacy side of things, Chainlink offers solutions like “mixicles,” an oracle mixer that eliminates the correlation between smart contract inputs and outputs. This process makes it difficult for any on-chain observer to match the settlement of a smart contract to its input. Mixicles can provide the necessary privacy to protect things like trading strategies, internal positions, etc., from rogue actors looking to steal such data. The system works similarly to mixers for cryptocurrency payments.
Ninth-Largest Crypto By Market Cap
The 80% increase in LINK’s price in July alone has seen Chainlink’s native token become the ninth-ranked crypto by market capitalization. But as is often the case, a surge usually has observers debating whether the current price action is FOMO-driven. For Konstantin Anissimov, the executive director at crypto exchange CEX.IO, LINK’s upward push is a result of initial retail interest front running the market followed by whales looking to profit off the token. Anissimov pointed out to Cointelegraph that the 200% hike in Chainlink network activity occurred as soon as the token recovered from its mid-March slump:
“Once the decentralized oracle’s token began reaching higher highs, investors rushed to exchanges to get a piece of the price action. On July 13th, however, there was a substantial spike in the number of large LINK transactions, which suggests that at this point whales entered the market. Approximately 300 large transactions were registered on this day alone, representing a 1,011% increase from July 11th. It seems like whales were able to give Chainlink the last push from $6 to nearly $9.”
Indeed, as previously identified, three on-chain metrics, including significant growth in the number of active addresses, explain the positive price action for LINK. Back in June, China’s Blockchain Service Network integrated with the project and is reportedly running over 135 nodes.
However, some critics say the meteoric rise in LINK’s price is not due to the growing utility for the altcoin token. In a now-deleted document, little known asset management firm Zeus Capital classified the recent gains as being the result of an elaborate pump-and-dump scheme by Chainlink.
Amid the litany of fraudulent activities ascribed to the Chainlink hierarchy in the 66-page document, the purported asset management firm described the project as being “crypto’s Wirecard.” However, it is important to note that Zeus Capital is reportedly holding a short position with a target of a 99% price decline for LINK.
According to a tweet by TheLinkMarine — a Chainlink proponent — the Zeus Capital report allegedly leads to an executive at lending protocol Nexo. Meanwhile, Nexo borrowed 350,000 LINK from DeFi lending market Aave only two days before the document was published. This purported link between the publisher of the document and Nexo does call the veracity of the claims made in the report into question. Excerpts from the piece seen by Cointelegraph before its removal urged readers to short LINK on Aave.
Possible LINK Decline And What About XTZ?
Short sellers disparaging Chainlink aside, there are indications that LINK could be seeing a significant downward retracement. In a conversation with Cointelegraph, Thor Chan, the CEO of AAX — a crypto exchange — opined: “Looking closely at LINK/USD price charts, we can see that the RSI has hit the overbought level, and historically, with LINK, that has led to some steep price drops.” Anissimov also shared a similar sentiment, stating that LINK has entered the overbought zone, adding that:
“Different sell signals are popping up within different time frames, such as the 3-day, 1-day, and 12-hour charts. These bearish formations indicate that Chainlink could be bound for a bearish impulse. However, LINK is currently in price discovery mode, so a corrective period that could see it retest the $5 support level, it will likely resume its uptrend and reach new all-time highs.”
As previously reported by Cointelegraph, LINK and Tezos (XTZ) often move in tandem. In July, XTZ also mirrored LINK’s gains, having risen 35% since the start of the month. With alts like XTZ and Cardano (ADA) experiencing significant uptrends, talk of another altseason has been gaining some traction.
However, Anissimov pointed to the relatively high BTC dominance as an argument against the start of any sustained altcoin resurgence, stating that only when BTC falls below 60%, he will acknowledge the start of an altcoin season: “During the last altseason, BTC’s dominance plunged from 95% to 61.5% within a two-month period between March and May 2017, then it dropped to 50% two months later, and bottomed out at 35% in January 2018.”
While Bitcoin remains tightly range-bound between the $9,000 and $9,200 price levels, altcoins like LINK, XTZ and ADA can see significant upward potential, as investors look for a quick profit. However, the FOMO created by such sudden bullish advances often sees these altcoin tokens quickly enter massively overbought levels. At such points, these tokens become likely to see a bearish divergence form between their spot price action and relative strength index. What follows next is often a massive downward retrace almost as large as the preceding bullish advance.
Chainlink Tops DeFi Ranking On CoinMarketCap Amid ‘Baseless Criticism’
Suspicion is mounting as CoinMarketCap defends its listing methodology and denies Chainlink paid for exposure.
Cryptocurrency ranking resource CoinMarketCap is facing a backlash after listing Chainlink (LINK) as the biggest DeFi token by market cap.
The website’s new DeFi section lists what executives consider to be the most important altcoins in the space, which is seeing considerable interest from traders and investors.
DeFi: Next Week Binance Coin?
Speaking to Cointelegraph, CoinMarketCap Head of Research, Gerald Chee, said that it employs “strict methodology” in order to determine if a particular token qualifies as “DeFi” and is therefore eligible for inclusion in its rankings.
Chainlink, a smart contract platform, is however an unlikely addition — following the section’s launch, various commentators argued that LINK is not strictly a DeFi token.
“Chainlink is now the number 1 defi token thanks to coinmarketcap deciding its a defi token and adding it to the list,” analyst and speaker Jason Fernandes wryly tweeted on Monday.
“Tune in next week when Binance coin becomes the second biggest defi token.”
DeFi, or “decentralized finance,” has formed something of a craze in trading circles this year, reminiscent of similar attention paid to stablecoins and ICO tokens in previous years.
As Cointelegraph reported, suspicions have accompanied the rise of the phenomenon, with multiple tokens seeing huge gains — and losses — over short timeframes.
“Baseless And Unfounded”
Continuing, CoinMarketCap strongly denied any idea that its rankings were fixed or that its methodology was biased.
“The criticism that ‘Chainlink may have paid CMC to get this category up’ is baseless and unfounded,” Chee said.
“We refute any suggestion that a project was behind the creation of our classification page, and we once again stress that CMC has never received any compensation towards the listing of any token or exchange.”
It added that Ether (ETH) was also left out of the list due to not conforming to its methodology.
CoinMarketCap is no stranger to controversy. Last month, adjustments to rankings caused an outcry, not only for tokens but for other components of the cryptocurrency ecosystem, such as exchanges.
Deutsche Telekom’s T-Systems Is Now A Chainlink Node Operator
A subsidiary of $80 billion German behemoth Deutsche Telekom has become a Chainlink node operator and will engage in “generalized mining.”
A subsidiary of Deutsche Telekom called T-Systems has become a Chainlink (LINK) node operator.
Deutsche Telekom is one of Germany’s leading companies, employing over 200,000 people and has a market capitalization of $80 billion. The fact that one of its subsidiaries is to become a provider of decentralized data feeds that are rewarded in cryptocurrency is significant. T-Systems’ announcement calls this arrangement “generalized mining”:
“By providing real-world data to the Chainlink network, T-Systems MMS engages in a so-called ‘generalized mining’, where it provides an IT service to a blockchain network while getting paid in digital assets for reliably doing so. As there is a significant value locked in DeFi, such IT services play an important role in the overall Ethereum ecosystem.”
T-Systems is in the business of digital transformations of large corporations and medium sized companies. The company employs more than 2,000 people and had a turnover of 176 million euros in 2019.
Roaming May Be Explored In The Future
Gleb Dudka, Analyst at T-Systems MMS told Cointelegraph that the company believes it is responsible for supporting public network infrastructure:
“You could even say duty as a telecom company to be a public blockchain network infrastructure provider.”
Although initially T-Systems will be just a node operator, telecom-specific use cases for blockchain tech — such as roaming settlement — are being considered, according to Dudka.
Binance Smart Chain Adds Chainlink Oracles For Better DeFi
Binance Smart Chain will integrate Chainlink data oracles to add usability to its blockchain, in particular, in the burgeoning DeFi space.
Binance Smart Chain — a dual-chain architecture from major crypto exchange Binance — is now integrating Chainlink (LINK) data oracles.
Binance Smart Chain adds smart contracts to the exchange’s original chain, Binance Chain, and is currently in testnet.
Chainlink co-founder Sergey Nazarov told Cointelegraph that in his opinion, this integration will save time and effort for developers who are building decentralized apps on the blockchain:
“With the Chainlink integration, Binance Smart Chain developers no longer need to dedicate months of engineering time to set up their own oracle infrastructure. Now, they can simply use Chainlink as an abstraction layer to build secure and reliable universally connected smart contracts.”
According to Binance, this integration will allow it to expand the usability of its smart contract enabled blockchain; in particular, in such areas as decentralized finance, payments and asset management.
Most blockchains, and Binance Smart Chain is no exception, cannot directly interact with outside data sources. This is meant to make its environment more secure, but nonetheless, narrows down its usability. The importance of robust oracalized data for the DeFi space has come to the forefront with recent exploits.
Oracles Are Essential For DeFi Growth
Nazarov believes that the availability of secure oracles is essential for the growth of DeFi space as a whole, pointing to the recent success of Aave.
He said, “What has been slowing down DeFi is the need for teams to build infrastructure while also building their financial products. It’s not a coincidence that the growth of Defi coincides with a growing abundance of high quality oracle data.
“DeFi projects can be launched and built in a matter of weeks rather than months. We’ve already seen huge success stories like Aave, who launched using Chainlink earlier this year and have rapidly grown to over $500MM in value secured,” he added.
Binance is the dominant exchange for the LINK token as over the past 30 days it processed almost one-third of the total trading volume. The further integration between the two projects adds up on several levels.
Korea’s Largest Blockchain Project ICON To Integrate Band Protocol Oracles
The BAND price is surging as the oracle provider partners with South Korea’s premier blockchain network, ICON.
South Korea’s leading blockchain network ICON has announced a partnership with Band, which has gained a lot of momentum recently.
The partnership will provide ICON developers with complete access to the BandChain decentralized oracle network to utilize various data and price feeds, according to the announcement.
Decentralized applications and DeFi ecosystems rely on accurate price and data feeds, or oracles, to function. The Band Protocol is an emerging decentralized platform that aggregates and connects real-world data to smart contracts.
ICON is deeply rooted in South Korea, shaping itself as the blockchain developer for the government. The platform operates a network of established enterprises and government agencies including banks, telecoms companies, and healthcare providers, and provides blockchain solutions and development to suit their needs.
Through its technology arm, ICONLOOP, it has worked on digitizing national identity authentication and decentralized passports. Now that it’s expanding into the growing dApp and DeFi markets, ICON requires oracles for its latest projects.
Min Kim, Founder Of The ICON Network, Said:
“The strategic partnership and integration with Band Protocol to the ICON Network will bring increased security and scalability to all the decentralized applications built on South Korea’s largest blockchain project.”
The Band Protocol has been in addition to Chainlink, which was already integrated into ICON’s systems earlier this year. The leading oracle provider was used to bring pricing data from traditional markets into decentralized financial products.
Band Battles Chainlink
Chainlink is the most dominant oracle provider at the moment, with major partnerships including Google Cloud, Binance, Matic Network, Ethereum Classic and the 0x Project. Its LINK token has been one of this year’s best performers, surging 325% from $1.80 on Jan. 1 to today’s price of $7.65.
But there is growing awareness of competitor Band Protocol that has inked partnerships with Waves, DeFi and staking app Frontier, decentralized gaming platform BetProtocol, and cross-chain interoperability protocol Gravity Hub.
The BAND token has surged in price this year — with most of the gains in the past month on the back of the DeFi boom. BAND has skyrocketed over 2,170% from $0.22 at the beginning of the year to an all-time high of just over $5 today.
Both tokens were performing well at press time with LINK gaining 6.5% on the day, and BAND notching up an increase of just under 10% over the past 24 hours.
2020’s Standout Cryptocurrency Chainlink Reaches Another New Milestone
Chainlink, one of the best-performing altcoins in 2020, is seeing consistent improvement in cryptocurrency community sentiment and social media presence.
Chainlink (LINK), one of the best-performing alternative cryptocurrencies (altcoins) in 2020, saw another statistic reach a record high, namely the number of Twitter followers.
According to market data and research firm CryptoCompare, social media followers of the project are continuously surging past new highs. Researchers at CryptoCompare wrote:
“LINK has been one of the standout altcoin performers of 2020 and seems to be going from strength to strength. Its social media followers seem to be growing in tandem as it gains popularity.”
Social media metric is not a conventional way to measure a cryptocurrency’s trend. But it could indicate a strengthening community and improving market sentiment. At the same time, Bitcoin’s Tweet Dominance remains well above LINK’s at 41.5% to just over 5%, respectively.
Chainlink Marches Forward With New Partnerships, DeFi Growth
The community’s sentiment around Chainlink appears to be improving due to two factors, namely new partnerships and the growth of Decentralized Finance, or DeFi.
Chainlink, which provides oracles through smart contracts, is primarily used by DeFi protocols. Oracles provide real-time market data and DeFi platforms need to implement oracles to operate seamlessly.
DeFi protocols have two options: use existing oracle service providers or build their own oracles. The latter is more compelling because it saves costs for projects. So far, DeFi protocols like Aave and Synthetix are working with Chainlink.
Aave CEO Stani Kulechov Said:
“I think part of composability is that you don’t have to build everything by yourself. Chainlink’s oracle is very good, and it’s part of this whole composability idea, it’s vital.”
As the total value locked in the DeFi market achieved a new high at $3.56 billion, it further boosted Chainlink’s usage by DeFi protocols. Other than DeFi-related growth, Chainlink recently partnered with Binance Smart Chain and German telecommunication conglomerate Deutsche Telekom’s T-Systems.
“You could even say duty as a telecom company to be a public blockchain network infrastructure provider,” Gleb Dudka, Analyst at T-Systems MMS, said in a recent interview with Cointelegraph.
Binance Smart Chain is also using Chainlink oracles to aggregate prices from exchanges, assisting Binance DEX to operate in the DeFi space.
“Chainlink oracles bring greater market coverage to DeFi applications on Binance Smart Chain by retrieving price data from data aggregators, which aggregate prices from all centralized and decentralized exchanges.”
Where Does LINK Go From Here?
LINK remains as the only top-30 cryptocurrency in the world to be down less than 20% from record highs.
After a strong performance in July, during which it hit a new all-time high, technical analysts are cautiously bearish.
In the short-term, Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, said LINK could pull back after a rejection.
“And rejected at $8. Might be on a slight support now, otherwise, we’re going to test the lows around $7.15 again,” he noted.
For now, the market appears to be short-term cautious and medium-term positive, based on strong fundamentals, rapid DeFi growth, and high-profile partnerships.
5 Years After Launch, Predictions Market Platform Augur Releases Version 2
* Augur released the second version of its betting platform Tuesday.
* The project was one of Ethereum’s first in 2015 with angel investments from Vitalik Buterin.
* Its v2 adds a suite of new crypto tools including IPFS, MakerDAO’s Dai, 0x Mesh and Uniswap’s pricing oracles.
The ultimate decentralized finance (DeFi) money Lego has arrived: Augur Version 2 released July 28, according to the Forecast Foundation.
“The Augur v2 protocol contracts have been successfully deployed to the Ethereum Mainnet. The contracts have been verified on Etherscan, and the deployers address can be found here,” the blog reads.
Originally launched in 2015, Augur was one of the first initial coin offerings (ICO) and Ethereum apps to garner notable attention for its blockchain betting market. And now v2 has all the bells and whistles of today’s DeFi market including the Interplanetary File System (IPFS), 0x Mesh, MakerDAO’s dai and Uniswap’s v2 oracle network.
The first version was notoriously clunky, slow and generally unusable despite its well-known presence in the crypto community. Originally, Augur was loosely based on Yale statistician Paul Sztorc’s Truthcoin, a prediction protocol built on the Bitcoin blockchain. (Sztorc has no affiliation with the project, according to a 2015 blog).
A second version had been in the works since the project’s early days, according to two of its founders, Jack Peterson and Joey Krug.
“The first version of Augur will likely be somewhat slow and slightly expensive (think pennies and many seconds per trade), but it’ll certainly be a beautiful glimpse of what’s to come.” the team wrote in a 2017 Medium article.
And, just as Eth 2.0 has faced unseen delays, so has Augur v2. Yet, with all that time, the team has been able to add a whole slew of Ethereum projects to its betting platform.
Off To The Races
Augur is an oracle. Oracles bring off-chain data on-chain.
That second sentence may have only seven words, but it’s far more difficult to implement than to summarize. The main difference is that on-chain data is objective while off-chain data is subjective.
When you send a bitcoin transaction, you press a button and the network records it. Nothing much to dispute. Off-chain data, on the other hand, is the world of CNN, Fox News and Facebook wine moms. We don’t know what the truth is – we only have “reports” of what occurred.
At its core, that’s what Augur (and its predecessor Truthcoin) try to do through fancy tokenomics: turn real-world events into wagerable events on blockchains. It’s also what oracle networks such as Chainlink and Band Protocol attempt to do.
Doing so successfully requires systems to encourage users to not misreport information and also to agree on one interpretation of an event. If this is even possible to accomplish at scale remains questionable.
Augur has three different betting types: a Yes/No market, a categorical market with up to eight choices and a scalar market between zero and 100, Tom Kysar, director of operations at Augur’s Forecast Foundation, told CoinDesk in an interview.
In the past, Augur v1 allowed certain markets to be declared “invalid” if the outcome of an event could not be properly diagnosed, but it led to many bets being negated.
Augur v2 will expand on this logic by allowing betters to wager on an additional option for all markets: invalid. An invalid market wager option helps demonstrate with money that betters think the wager was poorly constructed, Kysar said.
“‘Invalid’ [becomes] an explicitly tradable outcome in the market,” said Kysar.
One other perk of v2 over v1 is the settlement period. Market’s on the first iteration of Augur required seven days to close. Now it’s been trimmed between 48 to 72 hours assuming a market isn’t contested, Kysar said.
Augur is serverless, according to a blog released Monday. No, Augur doesn’t transcend modern computing – a byte has to be hosted somewhere. However, Augur has integrated the Interplanetary File Systems (IPFS) for decentralized client storage.
“Using IPFS means that the absence of no individual party can shut down client distribution, and alterations of the code from what is openly available on GitHub can be provably detected,” the blog states.
Kysar said Augur would release its software for reproducing on other Web 3.0 projects such as the Ethereum Name Service (ENS), too.
Data, Data, Data
Augur v2 is also data heavy – which isn’t great for the current Ethereum mainchain that is currently seeing historic demand. But it does make it smoother for users.
In Ethereum, decentralized applications (dapps) are hosted on what are called smart contracts. Smart contracts perform actions when paid to do so in the blockchain’s native currency, ether (ETH).
Not all contracts are created equal, however. Augur requires these contracts to carry a lot of data in what is sometimes referred to as “bloat.” Data-heavy contracts weigh down the network.
Recently, Ethereum developers have become concerned by the growth of the Ethereum state, which holds portions of the data for conducting transactions.
By the team’s admission, Augur will only add to the current Ethereum state in what has become a larger issue for the base layer:
The Augur V2 contracts tend to store more user-relevant data than many other similar contracts. For example profit and loss data as well as market metadata is stored on-chain. While this does mean transactions become slightly more expensive, it enables applications like the Augur V2 client to make fewer network requests and immediately pull relevant data.
Data heaviness translates to the average Augur user as higher fee rates. Kysar said his napkin math showed a successful bet on Augur at twice the gas cost when compared to a token swap on Uniswap. Opening a new market on Augur was about half the cost of opening a Balancer pool, however.
Augur will launch without an admin key, unlike a few other dapps that have received much criticism in the past.
Admin keys provide backdoors to on-chain contracts in order to make adjustments for live projects. Several Ethereum projects have been called out for allowing developers to hold these keys after launching the project or without disclosing the information. For example, Tornado Cash’s v1 admin keys were not provably destroyed until after a May v2 contract update.
Augur’s token, REP, is also getting a face-lift of sorts, Kysar told CoinDesk. REPv2 will have new logic introduced that the former token did not.
Augur raised $5.3 million in the August 2017 ICO for its Reputation (REP) token under the auspices of the Forecast Foundation, according to Messari. An ERC-20 styled token, REP is the platform’s quasi-governance token “used for reporting on and disputing outcomes of events,” Messari states.
Kysar said the old REP token cannot work with the new v2 contract, meaning a new token had to be produced. The Forecast Foundation has issued instructions for swapping the new REP for the old that “will need to eventually migrate… to REP v2 after Augur v2’s deployment,” another Augur blog states.
Augur is one of the first dapps to integrate 0x Mesh, an on-chain relay order book system for betting.
(That’s A Lot; Here’s A Breakdown.)
On-chain refers to the way 0x chose to set up their order book: It pings the main Ethereum network anytime a transaction needs to be executed, as opposed to off-chain order books which bundle pings. Each side has advantages not worth addressing here (although off-chain order books have grown in popularity lately due to the cost of gas).
Relayers speed up transactions across the Ethereum blockchain known for being slow and inefficient.
This inefficiency is a feature of how blockchains are arranged: as peer-to-peer (P2P) connections. If you think of settling a trade or a bet, you probably want it to happen fast which doesn’t work well in a network that whisper transactions instead of directly executing them from trader to order book.
Relayers establish a cluster of nodes that make transactions (the bets) speak to order books more quickly.
“0x orders are simply cryptographic messages that can be passed around, e.g. relayed,” 0x spokesperson Matt Taylor told CoinDesk in an email.
Augur now has a stable betting medium, USD value mimicker dai. Traditionally Augur has used ether, but as reported by CoinDesk in October 2018, a dai integration has long been in the works.
Why? ETH’s price volatility is bad for betting. For example, ETH started July at around $230 and has now kicked over $320 for the past few days. A long-term betting platform can’t use a native unit such as ether and expect people to stick around; imagine betting on an election only to see your bet’s USD value spike or plummet after the fact.
Not to mention, a decentralized stablecoin is a godsend for any betting protocol with questionable legalese. Veil, a betting platform built on top of Augur, shut down in July 2019 due to regulatory concerns – concerns that a decentralized stablecoin would help nip.
“We weren’t decentralized or regulated. Some users want a fully decentralized, unstoppable product and others want a regulated product. It’s hard to offer something in between that people find valuable,” Veil wrote at the time.
And, to round out the stack, Augur will use Uniswap as a price oracle service. All decentralized applications need to have prices given to them from a feed, like a Bloomberg Terminal. That’s one function Ethereum “money Lego” Uniswap can provide.
Uniswap is an automated market maker (AMM), meaning it pairs tokens together for trading and listing in a decentralized way just using the underlying logic of the application itself. If someone wants to list a token, like the new REPv2, they pay a fee and drop the token on the protocol. Anyone can buy the new token or create token “pools” with trading pairs on Uniswap.
For example, you could spin up a DAI/REP trading pair to purchase REP with DAI or vice versa.
“There is this huge demand for oracles, and it’s a very valuable thing to have an on-chain price feed, especially a decentralized one,” Uniswap founder Hayden Adams told CoinDesk when Uniswap v2 launched. “This is a service that Uniswap v2 provides to the world, and I think will indirectly benefit the Uniswap protocol.”
These pools create information for trading, especially pricing data. A highly liquid pool can be leaned on, in theory, to provide a good base rate of the token against another token such as ETH. So, you can learn the price of the REP token based on how many ETH you can nab for it from a pool.
NEAR Integrates Chainlink Data Oracles
NEAR blockchain protocol integrates Chainlink’s data oracles and considers using its verifiable randomness function for better gaming and DeFi applications.
NEAR, a blockchain protocol similar to what Ethereum 2.0 aspires to be, has become the latest project to integrate Chainlink (LINK) decentralized data oracles. NEAR blockchain is built around a new consensus algorithm called Doomslug. Notably, it employs sharding to achieve scalability.
NEAR Is All About User Friendliness
According to co-founder Illia Polosukhin, what makes NEAR different from a lot of other blockchains is user-friendliness; development environment and end-user interface are often challenging and cumbersome. He said:
“So if you think of gaming applications, many of them have not managed to get to the market because users cannot figure out how to even start playing right now. They need to install stuff and to buy stuff, etc. So we are really focused on building a full stack of tools, but also making sure the developer can really easily onboard users into the platform.”
Currently, there are not many decentralized applications using NEAR and its token is still locked. However, Polosukhin said that the token is expected to be listed on exchanges in August. He also stated that there are going to be some major announcements in between then and now.
Polosukhin thinks that some of the initial use cases for Chainlink’s data oracles may come from the DeFi space.
In the future, NEAR may also be using Chainlink’s verifiable randomness function, or VRF. Polosukhin believes that gaming applications present the most immediate use case, pointing out the trouble that the Gods Unchained experienced because Ethereum at the time lacked this functionality.
NEAR Will Celebrate Ethereum’s 5Th Anniversary
According to Polosukhin, though Eth 2.0 may become a competitor to NEAR, in its current incarnation they have more of a peaceful coexistence than direct competition. Discussing the upcoming fifth anniversary of Ethereum, he said:
“I think Ethereum proved that the idea of a Turning machine secured by Blockchain is possible and needed. From our perspective, we are part of the Ethereum community, so we are celebrating it with them.”
Recently, Chainlink has made a number of key announcements. The pace of these announcements has seemingly accelerated since a dubious report calling Chainlink a “scam” came out.
Crypto Fund Behind Chainlink Fud Is Offering 5 Bitcoin To Post Bearish Positions
A dubious crypto fund, Zeus Capital, is reportedly offering prominent Twitter members up to 5 Bitcoin to post a short-biased price analysis for Chainlink (LINK).
Rewards For Spreading “FUD”
Screenshots and tweets on Thursday showed the fund — whose identity and legitimacy is not verified yet — was giving monetary awards to influential Twitter users. The move follows its infamous report on LINK from weeks ago, one that said the cryptocurrency would “correct by 99%.”
“Icebergy,” an engineer and crypto developer, trolled Zeus Capital on Wednesday, asking for 5 Bitcoin for posting a “bad Link chart.”
Other Twitter users also seemed to have received similar bounties, all in return for a position that showed LINK in poor light. The receiving end included Scott Melker, who goes by “The Wolf of all Streets:”
Let me be clear. I would never take money to post something negative. Ever.
Zeus Capital did DM me this morning, but I replied politely (as I do to all DMs) that I had already posted a LINK chart yesterday. The screenshot is below for reference.
Zeus Capital’s massive efforts to write, promote, and spread a negative report on LINK begs the question: Why do it?
And it’s a good question too. In recent months, Chainlink’s partnerships have eclipsed any other crypto project, with its oracle services and verifiable randomness function among the foremost features.
Just last week, a gaming application, an exchange, and a digital identity service integrated Chainlink oracles to bolster their offerings — all requiring the use of LINK to pay the latter. More significantly, China’s Blockchain Service Network (BSN) also onboarded its oracle service — alongside Ethereum, Nervos, NEO, and others — to build an “internet-linked blockchain” in the country.
Even the World Economic Forum has recognized Chainlink. Earlier this year, it was among the top-50 tech pioneers awarded for their efforts in the technology sector.
With these developments in mind, the why behind Zeus Capital’s report remains unanswered, but the LINK marines could probably help.
Chainlink Partners With State of Colorado To Help Create A New Lottery Game
Chainlink and the Colorado State Lottery have partnered on a hackathon with the goal of creating new games to generate $1 billion in future revenues from its lottery.
Chainlink (LINK) and the State of Colorado have partnered on a hackathon with the goal of creating a new lottery game. There are $17,500 in prizes available for three winners, plus an additional $8,500 in Web3 bonus prizes sponsored by Chainlink.
$1 Billion Revenue Goal For Colorado Lottery
The Colorado Lottery has created a GameJam Hackathon that is open to participants from around the world. The state lottery hopes that the new innovative games will help it “reach its $1 billion revenue goal to fund outdoor recreation, land conservation and schools in Colorado, along with its commitment to responsible gaming.”
Colorado governor Jared Polis, perhaps, enthused by similarly successful projects in the neighboring state of Wyoming, is committed to making his government a leader in the technology space. He stated:
“Last year we launched Colorado Digital Services to begin developing critical public-private technology relationships to position our state government as a tech leader, but more importantly to better serve our population through technology”.
The opening ceremony will be held in the evening of July 31. Governor Polis and Vitalik Buterin are expected to speak at the event. According to the press release, this is the “Lottery’s first-ever public private partnership and hackathon”.
Chainlink Wants Blockchain To Succeed Beyond Tokens
Chainlink co-founder, Sergey Nazarov, told Cointelegraph that he is excited to be working with the Lottery. He also said that he wants to see blockchain technology succeed beyond its traditional sphere:
“We are thrilled to be working with the Colorado Lottery on enabling developers to build truly fraud-proof gaming applications. I think this shows that smart contracts, blockchains and oracles can be successfully composed to go beyond tokens and on-chain financial products (DeFi), into the many markets that need truly tamper-proof and highly reliable digital agreements.”
It will be interesting to see how new Lottery games will be using blockchain technology.
Chainlink’s Soaring Token Shows Lucrative ‘Oracle’ Role In Fast-Growing DeFi
Chainlink’s LINK tokens have quadrupled in price this year to become one of the biggest success stories this year in cryptocurrency markets.
The project’s market capitalization, now the 12th highest among all digital assets at $2.7 billion, according to CoinGecko, reflects investor perceptions of Chainlink as the leading crypto “oracle” provider. That means it supplies prices and data streams to semi-automated lending and trading systems built atop blockchains.
The function is crucial in the fast-growing arena of decentralized finance, or DeFi, which has generated such a speculative fervor in recent months that supposed money-of-the-future bitcoin has almost started to look passé.
But now Chainlink’s early lead as the dominant DeFi oracle is starting to attract competitors, and cryptocurrency investors are wondering if the niche industry might be due for a shakeup. Given the key role played by oracles in DeFi, users of the decentralized systems also stand to benefit.
Potential rivals could include dedicated oracle upstarts like Tellor as well as leading DeFi projects like MakerDAO that are developing their own solutions. Another data oracle, Band Protocol, launched a new version of its network on the Cosmos blockchain last month, to avoid congestion on the more popular Ethereum network, on which Chainlink runs. Others in the space include Augur and Nest, according to the industry-tracking website DeFi Pulse.
“I think it’s good that there are different projects that are offering this, obviously,” Niklas Kunkel, head of backend services for MakerDAO, said in a phone interview.
DeFi applications are built using “smart contracts” – strings of computer programming that are embedded into blockchain networks and designed to automate specific functions like lending or cryptocurrency swaps, based on incoming data inputs.
There’s no human middlemen as in the case of centralized banks and Wall Street trading firms to monitor pricing, so the smart contracts rely on distributed input sources, known as oracles.
Under Chainlink’s protocol, data is aggregated from third parties and then batched into oracle feeds that are streamed out to DeFi systems. Various information providers, mostly from the cryptocurrency ecosystem, provide the data as “node operators” and are rewarded with payments in LINK. Many of Chainlink’s oracles have over a dozen participants.
“If you don’t have data on-chain, you can’t build a contract for a certain market,” Sergey Nazarov, co-founder of Chainlink, told First Mover in a phone interview. “We don’t make contracts. We don’t secure blocks. We don’t secure transactions. We just feed data into various systems.”
But in the fast-moving DeFi industry, where anything resembling an establishment could be years or even decades in the making, few competitors are ready to concede.
MakerDAO, the decentralized-lending project behind the dollar-linked stablecoin dai, has provided its own distributed oracles since 2017 and now lists seven price feeds on its website.
DeFi projects including 0x, Gnosis and Kyber Network are using MakerDAO’s oracle feeds as well as contributing to them as third-party data sources, according to Kunkel. Node operators in MakerDAO oracles are chosen and paid in the project’s cryptocurrency, dai.
“When we started building dai, there weren’t any existing oracles that we could utilize,” Niklas Kunkel, head of backend services for MakerDAO, told First Mover in a phone interview.
A newer entrant is Tellor, which uses a complex algorithm, based on the SHA-256 hash function that’s used in bitcoin mining, to assure the integrity of its data.
“Miners compete for the right to submit the data,” Tellor CEO Michael Zemrose said in a Telegram chat.
The rewards for providing data are paid out in Tellor’s native token, TRB. Its price has nearly quadrupled this year, but off of a smaller base: The token’s market capitalization stands at just $16 million according to CoinGecko, a tiny fraction of LINK’s.
At this point, the DeFi oracle market is Chainlink’s to lose.
Community-Verified Oracle Platform Aims To Better Chainlink’s Accuracy
DeFi-focused oracle platform DIA is using crowd-sourcing to improve the accuracy of price oracles.
Oracle platforms, which provide links between blockchain smart contracts and trusted sources of real-world data, are a crucial component of many decentralized finance — or DeFi — applications.
With the meteoric rise of Chainlink (LINK) this year, one might be forgiven for thinking that it has the market all sewn up. But DeFi-focused challenger DIA (Decentralised Information Asset) claims that its community-verified data points can improve on Chainlink’s accuracy.
Cointelegraph had an exclusive chat with CEO Michael Weber about why DIA is different, ahead of the platform’s token distribution starting Aug. 3.
Crowd-sourced Oracle Platform
Swiss-based DIA was founded in 2018 on the back of a demand for more transparent and accessible data solutions across the digital asset and traditional finance arena.
Rather than provide data points and oracles itself, the platform enables the community to source and validate data through crypto-economic incentivisation:
“DIA sets out to democratize financial data, similar to what Wikipedia has done in the broader information space with regards to a central encyclopedia.”
This offers continuous incentives to deliver high quality data streams as well as to scrutinise and improve existing solutions.
In contrast, Chainlink usually only takes prices from a few places, which can lead to inaccuracies.
An Oracle To See Future Potential
Oracle platforms are big news currently, with value locked in DeFi platforms hitting all-time highs. But Weber believes that this could go even further to become comparable to traditional financial markets:
“The growth of oracle solutions will be strongly dependent on the growth of DeFi applications, while the growth of DeFi applications in turn will be strongly dependent on the level of quality and transparency that oracle solutions deliver.”
Open data provided by oracles, says Weber, delivers the fundamental building block of the entire space.
Token Distribution Via Bonding Curve Model
The DIA token distribution also differs from traditional token sales as it follows the bonding curve model previously previously used by Bancor and Uniswap.
This essentially pre-defines the relationship between supply and price for the offering period, with an asset that can be purchased from, and sold back to, a smart contract. If demand rises then so does price and vice-versa:
“This means that the market determines the price of the token according to the demand for it, instead of the team defining this itself. We think this method is a fairer distribution mechanism for digital assets and will continue to evolve.”
Chainlink Zeroes In On Smart Contract Adoption With New Grant Program
Chainlink quietly unveils a grant program with the stated goal of making smart contracts “the dominant form of digital agreement”.
Chainlink (LINK) introduced a new community grant program focused on making smart contracts “the dominant form of digital agreement”.
Dominating Digital Agreements
The grants will be awarded to projects that are “accelerating two positive feedback loops.” Such loops include the increased availability of on-chain data and increased security guarantees for users. The eventual goal is to make smart contracts a dominant form of digital agreements. Chainlink co-founder Sergey Nazarov elaborated on these points in a statement to Cointelegraph:
“We are accelerating the adoption of smart contracts as the dominant form of digital agreement, by enabling them to be used for the many mainstream use cases defined by DeFi, decentralized Insurance and fraud-proof gaming. The goal of the Chainlink Community Grant Program is to accelerate all the key dynamics relating to data, security and accessibility around Chainlink”.
Grant Allocation Is Not Disclosed
The categories that Chainlink has identified as key for the potential applications all revolve around the aforementioned themes of more data, more connectivity, and greater security.
The grants will be paid out in cash and/or LINK tokens. However, Chainlink has not disclosed the total amount allocated for the grant program, nor individual payout amounts. Nazarov said they are actively reviewing applications and welcome new ones:
“We are actively reviewing applications and do welcome both high quality development teams and talented technical individuals to contribute to this acceleration of smart contract through a grant.”
While Chainlink’s native LINK token has recently set new all-time highs, its success seems to be attracting more competition. One example is the Decentralised Information Asset (DIA), which seeks to use crowd-sourced data to improve accuracy.
Chainlink Reaches New LINK Price All-Time High Eyeing $10 Next
The price of Chainlink has climbed to new heights as LINK continues to be one of the strongest cryptocurrency market performers of 2020.
Without a doubt, one of the best-performing cryptocurrencies in the past few years is Chainlink (LINK). In recent days, the cryptocurrency surged from $6.80 to $9.30 capping a 40% percent move and becoming the number nine cryptocurrency by market capitalization.
Can Chainlink continue moving upward and even reach the magical number of $10 or higher?
Chainlink Rallies With 41% Since The Crash Last Weekend
As most of the cryptocurrencies saw a massive crash at the weekend, Chainlink did the same. The price of Chainlink dropped from $8.75 to $6.90, all the way toward the support level of the range it was in.
Since that drop, the price of Chainlink immediately bounced back heavily and tested the resistance at $8.75 again. Only this time the resistance broke down and the price rallied toward $9.60, a new all-time high.
What Are The Crucial Levels To Watch For Chainlink?
These are defined using the following chart, in which the crucial support and next target zones are shown.
The crucial support level is defined by the previous resistance zone at $8.75. The market and traders want to see a support/resistance flip of this level, confirming that new buyers are stepping in.
Such a support/resistance flip would warrant further upward momentum. The next resistance and target zone is $10.40, using the Fibonacci extension tool.
If the 2.618 Fibonacci level is taken, the next resistance zone is found at the $12.50 level. When assets or cryptocurrencies are in price discovery (without any historic price data at given price levels), the Fibonacci extension tool is a great asset to identify new target zones.
However, once the support/resistance flip fails, this upward breakout above $8.75 can be classified as a fakeout. In this scenario, Chainlink goes back in the range between $7 and $9. After such a fakeout, a test of the range low would be likely, which in this case is found at the $7 level.
As stated in the previous article, the likelihood that earlier levels get tested for confirmation of support is quite high after such a massive surge.
The support level at 0.00060000-0.0000062500 sats was crucial, as pointed out previously, and support was found there.
Since that test, Chainlink’s price has rallied by 42%, straight into the current resistance zone. Next to that, the 100-day and 200-day moving averages (MAs) are still acting beneath the current price, which is a bullish argument for continuation.
The most likely scenario for Chainlink at this point is a pause to the rally. A very probable scenario would be ranging between 0.00060000 and 0.00090000 sats before the next big surge occurs.
Through such a range-bound construction the price can stabilize and find strength for a further surge and rally towards $12 and higher.
As Chainlink’s price is acting inside a resistance area, it’s crucial for LINK to sustain support at 0.00085000 sats.
If that level is lost, the next big pivot is at the 0.00074000 sats level. Holding this level as support would likely lead to range-bound action as defined in the chart.
An apparent breakthrough of the 0.00085000-0.00088000 sats area would warrant a new test of the highs and possible continuation towards a new all-time high.
100% of Chainlink Addresses Are Currently In Profit
Chainlink’s bull run has created an abnormal situation where its entire supply is currently profitable according to an intelligence firm IntoTheBlock.
The recent Chainlink (LINK) rally has led to some unconventional results — 100% of its supply is “in the money” or profitable.
This metric simply represents a comparison between the asset’s current price and the price at which it was acquired. If the current price is higher, then it is “in the money”, if it is lower, then it is “out of the money”, and if it is the same, then it is “at the money”.
Litecoin — 47%, Bitcoin — 90%
According to an intelligence company IntoTheBlock, currently, the entire supply of the LINK token is ‘in the money’. For reference, about 90% of Bitcoin (BTC) supply is currently in the money and only 47% of Litecoin’s (LTC).
The question is, how can 100% of addresses be ‘in the money’ at the same time? This is highly unusual for any asset and is only partly explained by the parabolic rise of the asset. Every trade needs a buyer and a seller, so in theory some addresses should be ‘at the money’.
It’s possible the price was bid up on exchanges without any getting withdrawn to a wallet before the snapshot was taken. Alternatively, the proportion of addresses not ‘in the money’ at this time may be very small and rounded off to zero. We’ve asked IntoTheBlock for an explanation and will update this story when we hear back.
Chainlink’s bull run is easier to explain. It has announced a number of key partnerships, integrations and milestones. Also, the project just announced a grant program that will be awarding funds to projects that will help usher in the era when smart contracts become “the dominant form of digital agreement”.
Chainlink Partnership Proposes Its Own Take On Human Readable Ethereum Names
Chainlink partners with War Riders to create a hybrid solution for human readable Ethereum names that removes friction for blockchain gamers.
Chainlink (LINK), in partnership with a video game called War Riders, has introduced human readable Ethereum (ETH) names. These names will use a different approach than the Ethereum Name Service, or ENS.
Removing Friction For Newcomers
War Riders employs blockchain elements like non-fungible tokens which represent in-game items. It also has its own native cryptocurrency (BZN) that the gamers mine while playing. However, as with all such games, there is a certain amount of friction that gamers must overcome. For example, Ethereum wallets have long alpha-numeric addresses and hashes instead of simple names. This may present an unfriendly challenge to non-crypto native gamers.
Having the ability to use human readable names instead is handy and makes entry barriers less daunting. Unlike ENS, which is fully decentralized and involves registration and upkeep costs, this newly proposed hybrid solution would be absolutely free for gamers:
“Our system is partially off-chain (the linking part) and the linked ETH address can be changed by the user at will and doesn’t cost anything. Our system retains the benefits of on-chain security while gaining off-chain scalability and lower costs when doing crypto transfers”, explained to Cointelegraph War Riders CEO Vlad Kartashov.
A Hybrid Solution Relying On Chainlink Oracles
The proposed system is called a “hybrid solution” in reference to the fact that it is not fully decentralized. Users must instead rely on the robustness and security of Chainlink’s oracles. At a very basic level, the solution creates a database of linked pairs: wallet and name. Calls to this database are then routed through Chainlink nodes:
“So users create their own accounts and they sort of set a proxy to that username that verifies their Ethereum wallet. And any time you want to call this username, that username will be automatically resolved to their linked wallet by the Chainlink oracle.”
According to Kartashov the solution does not need to be limited to War Riders. In the future, it may be employed by other projects as well:
“Everyone can use it right now and right now is just an alpha phase and we’re not very open, but it is already life on the main net.”
Chainlink recently introduced a grant program aimed at accelerating smart contract adoption. The gaming space was named as one of its key areas of interest.
Chainlink rival BAND, the native token of Band Protocol, has soared by 65% in one day after Coinbase announced its listing among other factors.
Band Protocol (BAND), a rival blockchain network to Chainlink (LINK) — which is also at an all-time high — surged by 65%. Within 24 hours, BAND rose from $4.825 to $8, setting a new record high.
Three major catalysts appear to have triggered the rally of BAND, namely the DeFi (decentralized finance) boom, Coinbase listing and new partnerships.
Since June 1, the total value locked in DeFi protocols increased from $1.04 billion to $4.47 billion. The valuations of DeFi-related project tokens has risen substantially as the capital involved in the DeFi space surged by more than four-fold.
Band Protocol, like Chainlink, is a blockchain network for oracles. DeFi protocols rely on oracles to retrieve market data, as they cannot access raw data from other blockchains or websites. As such, oracles are critical to the success of DeFi applications.
As the DeFi market is rapidly expanding, the demand for oracles is also increasing in tandem. DeFi projects technically could make their own oracles but it requires time and resources to develop them. That is where oracles like Band Protocol and Chainlink come in.
Chainlink, similarly, has seen a strong performance over the past month. Since July 6, the price of LINK rose from $4.74 to $9.6, by more than 100%.
Coinbase Listing Of BAND
On Aug. 5, Zach Segal, the head of listings at Coinbase, said Coinbase Pro would list Band Protocol. The official Coinbase Pro account said it would list BAND by August 10, as long as liquidity conditions are met. The Coinbase Pro team said:
“Mon, Aug 10, our BAND-USD, BAND-BTC, BAND-EUR & BAND-GBP order books will enter transfer-only mode, accepting inbound transfers of BAND in supported regions. Orders cannot be placed or filled. Trading will begin on/after 9AM PT the following day, if liquidity conditions are met.”
Within one hour, the price of BAND surged from $5.6 to $8, after the Coinbase Pro listing was announced. Many cryptocurrencies have seen strong rallies in the run up to Coinbase listings. But after the listing, as seen in the case of Compound (COMP), they tend to see take-profit pullbacks.
Direct Partnerships With DeFi Platforms
On Aug. 4, Band Protocol and Elrond announced a partnership to use Band’s oracles to fetch off-chain data feeds. At the time, Elrond CEO Beniamin Mincu said:
“Cross-chain data availability will accelerate DeFi applications being built on Elrond, while off-chain data will open the door for a multitude of potent business applications.”
According to CoinMarketCap, Elrond has a market capitalization of $278 million and is the 43rd cryptocurrency by market cap. Backed by Binance Labs, it is a proof-of-stake (PoS) blockchain network built for large-scale decentralized applications (DApps).
Based on the recent trend of BAND, early investors have expressed optimism towards the project. Kelvin Koh, the co-founder of Asia-based venture capital firm Spartan Black, said:
“Congrats to the BAND team. Well deserved recognition for a team that works super hard and has proven that it can go against the odds. I expect more partnerships and exchange listings to come on the back of this.”
Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, pointed out that tokens launched from the Binance Launchpad has generally performed well. He said:
“We’ve seen some amazing runs on the IEO’s of Binance. Strongest movers are; KAVA, ERD and BAND as they all pulled a move of more than 10x. Recently, $PERL also joined the party with a big breakout. I think CELR, ONE and BRD can still join.”
Whether the strong momentum of BAND could offset the threat of a post-Coinbase listing sell-off many cryptocurrencies saw in recent months remains uncertain. For now, oracles and DeFi-related blockchain projects appear to be seeing an increase in demand.
Massive Short Squeeze Prompts Chainlink (LINK) Price To Rally 52%
A massive short squeeze in the futures market is the likely reason behind Chainlink (LINK) price surging by 52% on Saturday.
Chainlink (LINK) price continues to set new records as the DeFi-related token surged 52% to reach a new all-time high at $13.8799 today.
Over the last 24-hours, LINK has surged by 52%, rallying from $9.05 to as high as $13.8799 on Binance exchange.
As Chainlink demonstrated a strengthening uptrend, its competitor Band Protocol (BAND), which also operates as a network for oracles, spiked 50% to reach a new all-time high at $12.44.
What’s Behind The Chainlink Rally?
The sudden uptrend of LINK was likely caused primarily by the squeeze of short contracts in the futures market. As LINK was continuously rising, its funding rate stayed below 0%, hovering at -0.02%.
The cryptocurrency futures market employs a mechanism called “funding” to ensure the market is balanced. When the market is heavily swayed toward buyers, then buyers have to incentivize sellers and vice versa.
As an example, if there is an overwhelming number of traders shorting Chainlink on Binance Futures, then the funding rate would turn negative. In this situation, short contract holders or sellers need to pay long contract holders to maintain their positions.
Throughout the past several hours, as LINK price soared, its funding rate on Binance Futures remained negative. This is indication that as its price was soaring many traders were attempting to short the asset.
A continuous loop of short contracts caused a short squeeze, which, in turn spurred buying demand and fueled Chainlink’s momentum.
A pseudonymous trader known as Benjamin Blunts emphasized that while LINK is theoretically appealing to short, the market sentiment is bearish. When the market is overcrowded by one side, which in the case of LINK was bears looking to short the asset, it tends to move in the opposite way.
The Trader Said:
“I actually would be inclined to start looking for shorts soon, however it seems my entire feed is doing the same. So I will wait for another push higher I think, not really interested in standing in front of the strongest, fastest horse right now.”
Zeus Capital And Their Infamous LINK Short
The biggest narrative around LINK during the entirety of its rally revolved around Zeus Capital. The investment firm has publicly maintained a skeptical stance toward Chainlink, expecting LINK price to decline sharply. On August 9 the firm said:
“The ‘get rich fast’ narrative is a true indicator for manipulation. You can only win if you sell your $LINK before it goes to $0.”
A cryptocurrency investor called “Light” suggested that Zeus Capital holds a big short position on LINK, which was apparently at risk of liquidation. He said:
“And in one more poetic twist to the Zeus Capital story, for now, due to delays in the pricing oracle for their Aave borrow, even though LINK breached their liquidation price, their remaining DeFi short has not been liquidated (yet).”
It remains unclear whether a single short seller could have an immense impact on a cryptocurrency with a $2 billion daily volume on paper.
Link’s Trading Volume On Coinbase Surpasses That Of Bitcoin
Chainlink’s link token, driven by the increased popularity of decentralized finance (DeFi), has surged past bitcoin, becoming the most traded cryptocurrency of the past 24 hours on Coinbase Pro, the biggest crypto exchange in the U.S.
* Link’s 24-hour trading volume on Coinbase Pro is $163 million – nearly 70% higher than bitcoin’s trading volume of $96.48 million, according to data source Messari.
* However, link’s 24-hour aggregate global volume of $3.13 billion still amounts to just 17% of bitcoin’s global overall volume of $17.53 billion.
* Spike in volumes lends credibility to recent price rally.
* Link’s price jumped to a lifetime of $14.38 early Sunday.
* The sixth-largest cryptocurrency by market value has gained 68% in the last seven days alone.
* The token’s staggering 700% year-to-date gain makes bitcoin’s 61% price gain look meager by comparison.
* All 184,330 link addresses are now making profit on their investment, according to data source IntoTheBlock.
* Link’s meteoric rise looks to have been fueled by increased usage of Chainlink’s price oracles in the ever-expanding DeFi space.
* Price oracles act as a bridge between cryptocurrency smart contracts and off-chain data feeds.
Compound Gets Ready To Deploy Decentralized Oracle
The Compound protocol is set to introduce Open Price Feed — a decentralized oracle whose crypto market prices will allow the project’s lending system to function.
The Open Price Feed is currently being tested on a variety of networks. It has operated for almost two weeks on the Ethereum (ETH) Kovan and Ropsten testnet for almost two weeks, and its price feeds have been available for 10 days on mainnet. On Ropsten, a proposal to use the new price feed locked in on Aug. 6.
Compound developers are calling the community to test the new system in order to integrate it into the protocol as quickly as possible. The system has been continuously audited as each new feature was integrated.
The system relies on price reporters and posters. The reporters will be exchanges, initially just Coinbase Pro, who will regularly sign price data with their public key. Posters, on the other hand, will be responsible for publishing this signed data to the blockchain. Posters are permissionless, meaning that anyone could become one if they wish.
In addition to Coinbase Pro, the system also uses the on-chain Uniswap V2 price feed as a fallback. Called the anchor price, it acts as a sanity check on input from other exchanges. If the price being reported deviates over 20% from a 30-60 minute time-weighted average of Uniswap prices, the off-chain data will be ignored.
The time-weighted average is required to protect from potential attacks on Uniswap, especially those involving flash loans.
Other price data providers are expected to be onboarded via governance by COMP token holders. It is also possible that after some time and enough price data reporters, the system will stop using the Uniswap fallback.
In June, Compound launched its protocol token, which gives holders the ability to participate in the protocol’s decisions. About 50% is set to be distributed to users of the protocol through a somewhat controversial liquidity mining incentive. The rest remains allocated to previous Compound investors and the team, though none of it is held by the company.
Through this distribution, the protocol is no longer being operated by Compound Labs, Inc. The introduction of a permissionless oracle is an additional measure to reduce Compound’s reliance on its founding team.
What Chainlink’s Plasm Integration Means For Its Future As A Parachain
Chainlink’s integration domination continues.
Plasm, a smart contract protocol built on Polkadot’s Substrate framework, has integrated Chainlink’s (LINK) price feeds. Interestingly, the oracle project itself will likely soon become a Polkadot parachain.
Polkadot has a modular design wherein various parachains serve particular use cases. Its mainnet does not have smart contracts, but Plasm hopes to fill this void.
Plasm CEO, Sota Watanabe, told Cointelegraph that they intend to use Chainlink’s data oracles for Plasm’s Lockdrop — a token distribution mechanism pioneered by Edgeware. In order to receive Plasm’s tokens, a user needs to lock Ether or Bitcoin in a smart contract. In return, the user receives a certain amount of Plasm’s native tokens. The payout is proportional to both the amount of assets allocated and the duration of the lockup. At the end of the lockup period, the user gets their crypto assets back, along with their newly issued Plasm tokens. Soto said:
“If you have an ETH or Bitcoin, you have to lock your ETH on the Ethereum or you have to lock your Bitcoin on the Bitcoin network. So we need to get the price of Ethereum and Bitcoin on the Plasm network to issue some coin.”
Sota said that when Chainlink becomes a Polkadot parachain, it should only serve to make the Plasm network more capable. Although Polkadot supports data sharing between parachains, real-life applications still require information from other chains or from outside centralized sources:
“Once they connect their blockchain to Polkadot, we can get data and send data from the Chainlink blockchain to the Plasm network.”
Despite the modular design of Polkadot and the fact that some of its parachains may integrate Chainlink’s oracles, there still appears to be a need for native integration.
Chainlink To Provide Data For Farming Insurance Startup Arbol
Data provider Chainlink will provide decentralized weather data for insurance startup Arbol, according to a blog shared with CoinDesk.
Arbol provides crop insurance for small to medium-sized farmers or enterprises. Smart contracts pay claims to subscribers when a preset value – such as the average monthly temperature or rainfall – turns out different than the contract specifies, the firm said.
Called parametric insurance, the financial derivative is often used in agriculture to hedge against future events, such as a bad harvest. Other firms, notably CME Group, also offer weather derivatives that require middlemen.
Arbol insurance, on the other hand, self-executes using a mix of smart contracts and Chainlink data – no holdups on payments.
“Users are able to create derivatives on the blockchain that pay out based on weather outcomes. This allows weather-exposed entities like farmers to hedge their weather risk,” Arbol said in the blog.
The startup launched out of stealth in April after raising $2 million in a 2019 seed round, according to Crunchbase.
Decentralized Weather Data
Chainlink pipes data from the National Oceanic and Atmospheric Administration (NOAA) and other sources, the blog states.
Tamper-resistant data is necessary for parametric insurance products that don’t require middlemen, Arbol founder and CEO Siddhartha Jha told CoinDesk in a phone interview.
Arbol’s application is built on Ethereum smart contracts and also secures data via the Interplanetary File System (IPFS), according to a recent Arbol blog. The firm currently operates in the United States, Cambodia and Costa Rica.
Chainlink first presented decentralized data networks, known as oracles, as agnostic reporters for insurance companies up to four years ago, Chainlink founder Sergey Nazarov said in a telephone interview.
Farmers Could Soon Be Hedging Their Risks With Decentralized Weather Data
They’re tackling a problem which affects billions of people.
Arbol, a platform that allows farmers to hedge weather risks, is integrating Chainlink data oracles.
Arbol CEO Siddhartha Jha told Cointelegraph that his company uses blockchain technology to solve a problem that affects billions of people around the world:
“It’s crazy that so much of the world’s livelihood, it’s about two to three billion people, they estimate, is affected by weather day to day.”
Farmers are likely the hardest hit by weather unpredictability. For many, severe weather conditions can lead to the loss of their livelihood, or even starvation. Although farmer insurance has been around for decades, if not centuries, according to Jha, it is unaffordable for the vast majority:
“If you had less than two hundred thousand dollars in premium to spend, you actually had no real access.”
Jha claims that Arbol both lowers the entry barrier and makes hedging less expensive. With blockchain, settlements and payouts can be instant, whereas in the centralized world, participants may have to wait weeks, if not, months.
Farmers can hedge against various adverse weather conditions having a negative impact on their crops. They can buy a hedge — for example, if a temperature in their region reaches a critical level, which will trigger an automatic payout. By adding Chainlink’s oracalized weather data feeds, the company’s platform has become more decentralized and resilient.
Jha Said That The Platform Went Live In February And Has Already Experienced Significant Real-World Demand:
“We have done over 210 transactions, about $13 million of notional risk. This is with farmers growing a huge array of crops from corn, soybeans, to fruits and other specialty crops. We have worked with agribusinesses hedging their supply chain risk.”
Although Jha emphasizes that his platform is meant to provide a real world utility, he believes that in the future, it may become a highly attractive DeFi product:
“These weather portfolios are excellent investments for the DeFi community, if you have it in tokenized form, if you tokenized the weather risks; these portfolios, the yields are quite attractive. Risk — reward is great because it’s very diversified and also not correlated to stock and bond markets.”
Jha said that they have had a few payouts transacted in stablecoins, but the vast majority prefer good old-fashioned fiat for now.
A New Cardano-Based Project Is Handling Oracles A Lot Differently Than Chainlink
Cardano (ADA) is getting into data oracles ahead of the Goguen era that will add smart contract functionality, taking a different approach than Chainlink. The first oracles are being built in partnership with EMURGO, one of the companies in the Cardano ecosystem, and Ergo (ERG).
The first two oracles are deployed on Ergo and provide price feeds for the two trading pairs: ADA/USD and ERG/USD.
The new model introduces Oracle Pools, which are capable of incentivizing good and disincentivizing bad behavior. Ergo’s core developer Alexander Chepurnoy told Cointelegraph that the idea involves major players in the DeFi ecosystem donating funds to the oracle pools that they find useful. Then, the data providers get compensated with the funds from the pool.
The model also envisions data providers staking funds as collateral. If a data provider feeds low-quality data, his stake can get “slashed”. Unlike Chainlink, which introduced a LINK token as gas-like payment mechanism, the new model is cryptocurrency agnostic.
Rumors started peculating when Cardano founder Charles Hoskinson tweeted about talking to Chainalink’s co-founder Sergey Nazarov. Some were expecting an announcement to be made soon about Cardano integrating Chainlink’s oracles.
However, thus far, these rumors have not materialized. Likely, Cardano is in no hurry as there is little use in oracles before the Goguen era. At the same, it allows it time to test oracle infrastructure developed in-house.
Chainlink Acquires A Privacy-Preserving Oracle Protocol From Cornell University
One of the men who coined the term “proof-of-work” to join as chief scientist .
Chainlink (LINK) has acquired a privacy-preserving oracle protocol DECO from Cornell University and one of its creators, Ari Juels, will be joining Chainlink as chief scientist. Previously, Juels served as chief scientist at RSA and has been teaching at Cornell University since 2014, one of the premier blockchain hubs in the world. He is taking a sabbatical to focus on his work at Chainlink. Along with his research partner Markus Jakobsson, he coined the term “proof-of-work”.
DECO employs advanced cryptography and zero-knowledge proofs to provide enhanced privacy to its users. In a Cointelegraph interview, Chainlink’s co-founder Sergey Nazarov said the integration of DECO will not only increase security of the project’s infrastructure but will potentially create new use cases:
* DECO-enabled Chainlink oracles will have big implications for smart contracts across enterprise, consumer, and even DeFi applications. Basically, any smart contract that was previously limited by private data will soon be able to function on a public blockchain like Ethereum without revealing any confidential information to the blockchain.
Nazarov believes that enhanced privacy will benefit both consumers and enterprises. The latter may be able to prove to each other the state of their data without revealing it, while consumers may be able to prove personal and financial data without providing access to it.
He also said that this integration would potentially open up Chainlink’s oracles to new data sources:
* This is already leading to the addition of various data sources that were previously much more difficult to place on-chain, due to the fundamental nature of public blockchains being publicly viewable, and the private nature of various sources of high value data.
Answering our question whether Juels will be working full time at Chainlink, Nazarov said:
* He has taken a sabbatical from his academic work and is currently focused on working on the Chainlink protocol. He will also be leading our entire research team, effectively stewarding the technical direction of the protocol as a whole.
Nazarov said that it can also create “endless possibilities” in the DeFi space – anything from credit scoring to proving loan collateral without the need to reveal sensitive information.
Chainlink Lands On Bitcoin Sidechain RSK With New Integration
Developers on RSK no longer need to create their own oracle to build their DApps.
Bitcoin (BTC) sidechain RSK will soon be equipped with Chainlink (LINK) oracles, enabling developers on the smart contract-enabled blockchain to tap into market price feeds and other off-chain data to build their applications.
The integration is being developed by IOVLabs, the company behind the RSK sidechain. It is currently live on testnet and expected to be launched on mainnet in less than a month, an IOVLabs spokesman said.
Chainlink data will be ported to RSK via RIF Gateways, an interoperability framework that is designed to let developers access a broad array of data from other blockchains and the external world.
The framework connects to Chainlink nodes and relays data between them and the RSK blockchain. The system also makes use of the RSK to Ethereum bridge that enables LINK token transfers between the two ecosystems.
Julian Rodriguez, head of RIF Gateways, told Cointelegraph that this allows Chainlink Node Operators to be compensated with “any token in the Eth blockchain.” If they wish to be compensated in LINK, “they can, they just need to go through the bridge to get those redeemed,” he added.
Rodriguez said that with this integration, “developers can capitalize on a smart contract network that’s anchored to the strongest Proof of Work blockchain.”
RSK is a Bitcoin sidechain that uses a pegged version of BTC as its native currency. While the peg process is facilitated by a federation that maintains custody, similar to solutions adopted by WBTC or Liquid, its blockchain piggy-backs off Bitcoin existing mining capacity through merge mining.
The company has recently been pursuing the goal of “Bitcoin DeFi” to capitalize on the boom of lending DApps and decentralized exchanges that occurred primarily on Ethereum. It features its own lending protocol that generates a stablecoin, called Money On Chain, which uses RSK’s BTC for collateral.
While Chainlink oracles are widely used in DeFi, many projects still prefer to roll their own. The RSK integration could simplify development on the platform with an off-the-shelf solution, with Rodriguez saying that “it made a lot of sense for [RSK] to include Chainlink as one of the oracle technologies.”
RSK’s security and functionality relies on Bitcoin, but it is still a separate network with a different architecture that heavily focuses on smart contracts.
Seeking to capitalize on its generalized scripting capabilities, the project recently started branching out into wider interoperability and enterprise-focused solutions. In August, RSK was featured in an energy trading pilot in Los Angeles, powering a circular energy economy experiment.
Another enterprise pilot involved a group of Argentinian banks that tapped into RSK technology to improve the efficiency of direct debit transactions.
Prediction Markets’ Time Has Come, but They Aren’t Ready for It
This should be prediction markets’ moment to shine.
In about 60 days, Americans will vote in a presidential election both sides consider pivotal for the country’s future amid a pandemic, civil unrest and the highest unemployment levels in a generation.
Given how wrong traditional pollsters and pundits were in predicting the outcome of the 2016 election, it makes sense for anyone strategizing for the future to look for alternative forecasting metrics. With coronavirus sweeping the nation, causing concern about voting in person, this election may be more unpredictable than the last.
“The election is a huge event. It’s kind of the Olympics of prediction markets,” said Sam Kazemian, co-founder and president of Everipedia, which created PredIQt, a market running on the EOS blockchain.
Conceived by a heretical professor in the 1980s, prediction markets harness the wisdom of the crowd and induce experts to put skin in the game to suss out what they really think will happen.
These markets have much in common with those interested in cryptocurrencies and decentralized technology – a distrust of hierarchical systems, a penchant for iconoclastic thinking and the questioning of assumed authorities.
But prediction markets aren’t gaining as much traction as one might expect given the opportunity.
Centralized ones like PredictIt are heavily regulated and charge high fees. Nascent decentralized prediction markets, which run on public blockchain networks, are sparsely used. And the ones that run on Ethereum, the second-largest blockchain, now face high “gas” fees for users to run computations.
Even Robin Hanson, the contrarian economist who came up with the concept, said he is disappointed with prediction markets’ overall performance.
“I thought if people make a claim and then they have a betting market on it, supposedly, those betting market odds are pretty reliable,” Hanson, an associate professor of economics at George Mason University, told CoinDesk recently. “Isn’t that how we should crush stupidity? At least, that was the vision.”
PredictIt vs. Augur
Experts like Rutgers University math professor David Pennock see a few trade-offs between centralized prediction markets and decentralized prediction markets, the most famous of which is Augur.
Centralized markets tend to be more active and are highly liquid, meaning that a good number of shares, or bets, can be bought or sold without radically changing the price.
On PredictIt, the most popular prediction market platform, over 90 million shares (valued from $0.01 to $0.99 each) have traded on the presidential election market. Shares of Democratic candidate Joe Biden traded at 57 cents Tuesday, signaling the market thinks he has a 57% chance of winning.
The centralized markets have judges to adjudicate disputes and can ensure quality control, so the outcomes traders bet on are clearly defined, a notoriously hard thing to do among decentralized options.
“Centralized markets are not immune to controversial outcome resolutions. However, at least the judging procedure is clear,” Pennock said.
But there are several drawbacks. For one thing, users have to trust the company hosting a market to deal out their winnings accordingly (minus its cut, of course).
Further, online gambling is largely illegal in the United States and that limits who can take part in prediction markets, which are essentially a form of gambling. PredictIt and the Iowa Electronic Market operate in the U.S. under the legal protection of a no-action letter from the Commodity Futures Trading Commission (CFTC).
These markets are non-profits, and PredictIt, for example, only lets users purchase up to $850 worth of shares on each contract. So in the 2020 presidential winner market on PredictIt, for example, users can spend $850 max on Biden being elected, and the same amount on Trump not being elected. Both markets are run for academic purposes, one of the conditions allowing them to operate under the no-action letters.
By keeping out wide swathes of traders and limiting how much participants can wager, regulation undermines prediction markets’ ability to express what people truly believe, as Hanson envisioned.
Centralized betting sites inflict a lot of “pain points” on users, such as harvesting a portion of their winnings and banning those who win too often, said Joey Krug, the founder of Augur, explaining the impetus for his project, built on Ethereum. (PredictIt charges a 5% “processing fee” for withdrawals, after a 30-day waiting period.)
A perceived benefit of a decentralized approach is avoiding the legal gray area between markets and gambling that can get platforms shut down, though Pennock is skeptical it’s truly insulation against authorities coming after them if volumes get big enough.
On Ethereum-based Polymarket’s presidential election market, President Donald J. Trump is given a 50% probability of winning the election. In contrast, the forecasting site FiveThirtyEight gives Trump just a 31 in 100 chance of prevailing based, in part, on polling data.
There are at least two ways to interpret the discrepancy. One is that the bettors on Polymarket know (or are willing to acknowledge) something about public sentiment that the Beltway pundits at FiveThirtyEight don’t (or won’t).
Another is that the $52,686.06 wagered on the election on Polymarket as of Tuesday is too little for the odds to signal much. On PredictIt, the betting on who will win the election dwarfs Polymarket’s, with hundreds of thousands of shares, each worth at least one cent, traded daily.
There, it costs 47 cents to buy a contract that pays $1 if Trump wins, meaning market participants see his chance of winning at 47%. Still higher than FiveThirtyEight, but not quite neck-and-neck.
Of the handful of decentralized platforms, only Augur has been around through a prior U.S. election, and that was a midterm.
“That was our biggest market in version 1.0,” said Peter Vecchiarelli, the operations lead at the Forecast Foundation, which develops Augur’s software. The market saw “over a million dollars in open interest” on the question of which party would win the U.S. House of Representatives.
“That was where we came to this collective idea of rallying around the presidential election,” Vecchiarelli said.
Over $100,000 worth of bets on the U.S. Presidential race have been made on the recently relaunched Augur across three different markets (anyone can create markets on the platform, even competing markets asking the same question). The leading one has 57% odds that Trump will lose.
PredIQt’s biggest market right now is on whether the President will be reelected, with 1.9 million IQ tokens (just $4,163) in bets.
And there are TRUMP and BIDEN coins trading on crypto derivatives exchange FTX, each of which pays out $1 if its namesake candidate wins (currently running $0.44 and $0.54, respectively). If the candidate loses, the token goes to zero.
Veil, a short-lived startup in the Augur ecosystem, created a version of the software specifically to support bets on the 2020 election last year but folded soon afterward, citing lack of demand.
Prediction markets on Ethereum have encountered a blockchain-specific pain point: transaction fees.
“That is absolutely a problem,” said Stefan George, a co-founder of Gnosis, which is leading the technical development of Omen, a prediction market on Ethereum. “Everything below a $1,000 bet is basically economically unfeasible.”
Kazemian noted Ethereum’s gas problem as well. “For us, it’s free,” Kazemian said. “Truly for prediction markets, I think this was a sweet spot to be on EOS.”
Augur wouldn’t go into detail, but Vecchiarelli said it’s close to a solution that should mitigate the fee situation. He wouldn’t say what the team is doing, but it’s not going to a layer 2, or off-chain, network, he said.
Shane Coplan, Polymarket’s founder, said transaction fees were high for its users as well, and he plans to migrate Polymarket to a layer 2 scaling solution to reduce fees and speed processes.
“Augur’s smart-contract architecture makes the transactions a lot more expensive,” he said. “Our automated market makers are cheaper, but still expensive given current ETH gas fees.”
The Forecast Foundation still wants Augur to take advantage of the election, but George said the Omen community has learned a different lesson from 2020.
“Initially, we were really fond of, ‘Let’s really push for this election.’ This view has changed a little bit, because basically what we realized is: The main users of Ethereum, what they really care about is Ethereum itself,” George said.
Omen has seen a total volume of $87,470 on the presidential election versus $149,300 on whether Ethereum 2.0 will launch before 2021.
What To Expect
All the BUILDers CoinDesk interviewed expect the market depth for the election to improve, both in terms of bets and the number of markets, but most of them expect it to hew close to the national election.
So there might be some markets on which presidential candidate wins which states, but there probably won’t be a lot of Senate or congressional seats with markets this year on the crypto platforms.
In the bigger picture, prediction markets inventor Hanson said he doesn’t think people are asking the right questions on prediction markets.
For this reason, he refused to highlight any one market as doing a good job.
“I’d say that the most socially valuable questions would be the consequences of who you elect,” said Hanson. “So if you say we shouldn’t have Trump because we’ll lose democracy or nations won’t respect us, then let’s have markets estimating those consequences of the election. That’s more interesting than who will win.”
Crypto.com Views Chainlink Integration As A Gateway To DeFi
Crypto.com believes that having control over one’s finances, data and identity is a basic human right.
Crypto.com is adding Chainlink’s price feeds to its decentralized finance wallet as it begins expansion into the booming space. The company’s chief operating officer, Eric Anziani, told Cointelegraph:
“I would say with the partnership with Chainlink is kind of our first integration with a DeFi protocol, it brings value to our customers in terms of providing transparency in the prices that we’re giving them in our DeFi wallet and also making sure our ecosystem token CRO can be integrated into the external protocol by building a price feed for CRO specifically thanks to the Chainlink architecture.”
The first trading pair that will receive a decentralized price feed is CRO/ETH, which will be followed by CRO/USD. Anziani said that the company is starting with DeFi tokens, but in the future, it plans to use Chainlink’s price feeds for all the tokens in its ecosystem.
According to him, the expansion into the DeFi space is not driven by the desire to capitalize on the hype, but rather by the fundamental belief that every human being has an inherent right to control their finances, data and identity:
“We are a very strong believer that blockchain tech and DeFi, in particular, can potentially empower millions to exercise this right, the right to have the control over their money. And we’ve embarked as a company on a mission of building a full ecosystem to make sure Blockchain tech is adopted and used.”
Discussing the recent controversy around leading exchanges listing the hyped SUSHI token, Anziani said that in his opinion, Crypto.com customers trust it to do its due diligence prior to listing a new asset; therefore, the company decided against listing it:
“We were aware of the project and when we looked at it, we felt it was not the right time.”
As exciting as the DeFi growth has been, the trend toward a more sustainable approach should be welcomed.
Enterprises Need Third Parties For Oracles To Work
Paul Brody is a Principal and Global Blockchain Leader at EY.
Oracles, an often overlooked feature of blockchain technology, are having a moment. In ancient times, oracles were people or gods who provided wisdom or knowledge. In blockchains, they are mechanisms for providing sources of truth that did not originate within the system itself.
For much of the blockchain era, especially in the era of cryptocurrencies, oracles have not had a significant role to play. Whether ether or bitcoin or most ICO tokens, everything you need to know about the token, such as ownership and embedded logic, exists on the chain. No external wisdom is needed.
Now, as blockchains find new uses, this long-neglected functionality is suddenly the hottest ticket out there. In the future, they are going to have an important role in enterprise blockchain usage, enabling business and financial operations in both the “real world” (e.g. off-chain) as well on the blockchain.
From financial services to product purchase agreements, at least some information from exchange rates to interest rates to proof of shipment delivery is needed from outside the blockchain. And because deals on the blockchain will depend on this information, it’s absolutely critical it is trustworthy.
While many people are interested in oracles for financial services, they will also be essential for implementing enterprise smart contracts. Current models like Chainlink start with the presumption that having multiple parties verify data is better than having a single party.
They design a decentralized model from the get-go, and when combined with the ability to invest your stake against the quality of your own reporting, offer a powerful incentive to stay honest.
This model isn’t going to work for most enterprise agreements. And even fancy tools like zero-knowledge proofs will not solve a bigger problem. How do you know if the oracle is being truthful if there is only one source of that information? Spoiler alert: You need an independent third-party for that.
While the multiple-redundancy model may work in many business cases, for a lot of enterprise agreements there is only one source of data. Take a typical agreement between a buyer and a seller of, say, factory equipment. There is an exchange of money for the product, and payment is usually triggered by delivery of the product. This is really the simplest of all enterprise deal models, so let’s take that apart, one piece of truth at a time.
The starting point has to be the question of whether or not the product and money are real. In the case of fiat-backed tokens, you need to know the token issuer has money in the bank equal to that number and, most important, that money in the bank is not committed against other debts.
The same goes for the product to be exchanged. When it comes to triggering payment, the record of delivery from the shipper can be used but, again, only that shipper really has that information, and it is not a disinterested party because it may be penalized for late deliveries or damaged goods.
“In short, you need the blockchain-equivalent of an audit. ”
Nor is there any software-based answer that can address most of these questions. Zero-knowledge proofs are useful in providing answers without disclosing underlying information, but if the underlying data can be manipulated then they aren’t necessarily helpful. If you borrow money from one account to put in another, a software engine looking at that account may conclude you have enough to cover your online tokens even when you do not.
The only sustainable way of solving for reliable oracles, when only a single party can provide that truth, is through a third-party assessment. In short, you need the blockchain-equivalent of an audit, but not something that is only updated once a year with an annual report. Fortunately, such things exist and have done so long before blockchains came around, but they were used for other purposes.
These third-party assessments are, it turns out, a staple of the audit business and they come in two main flavors: attestation reports and systems of controls (SOC) reports. Attestation reports are the gold standard, written to the same requirements as a legal audit, and signed by an auditor and backed by the audit firm in question.
SOC reports look more at the process of reporting than the output. Essentially, they certify the company in question has put in place a process and tools to safeguard the accuracy of the reporting, without specifically verifying the content of each output.
I foresee a big future for these reports because they enable truly liquid commerce on blockchains. It should be possible for companies to attach attestation or SOC reporting links to digital tokens, showing which ones have been subjected to a form of verification. It is not practical or scalable for each buyer or seller to have to verify these things all on their own.
On learning about SOC reporting and attestation reports, many people say it’s contrary to the vision of a trustless blockchain environment. This is true, but that gives too much emphasis to trustless, and not enough to properly decentralized. While cryptocurrencies can indeed be trustless because they exist only on-chain, other forms of commerce require some level of trust.
In fact, a properly decentralized and competitive system can be set up to minimize the amount of trust needed and maximize the efficiency of the ecosystem. Having a third party perform an attestation or issue a SOC report aligns incentive and minimizes conflict of interest. Third parties that do a bad job or are caught lying will lose their business. In a properly decentralized environment, companies will have a choice of third-party providers, keeping competition in the system to drive down prices.
There is also a big difference between trusted third parties having a role in the system and having a permissioned or centralized system. In a genuinely decentralized blockchain environment, there is no absolute requirement to use one of these third-party services.
Just like the internet, access to the network is permissionless, and while customers may prefer to buy only from companies that have an SSL certificate issued by a well known authority, users are not prevented from operating without one.
Oracles are of immense importance to the future of blockchain commerce ecosystems. We cannot develop large-scale commerce without trusted inputs. We will need, however, to accommodate multiple approaches to certifying information, including ones that lean on off-chain judgement and verification, not just clever algorithms.
Polkadot DeFi Developers May Soon Get A New Oracle Provider With Historic Data
Polkadot snatches yet another oracle provider from a different blockchain.
Distributed storage project Bluzelle will be collaborating with the Web3 Foundation to bring its oracle system for use in the Polkadot decentralized finance ecosystem.
The project formally announced on Sept. 15 that it would integrate its services with the Polkadot network, specifically its price oracle solution that could be used by DeFi projects building on the network.
Bluzelle is a distributed database system featuring a set of validators committing their stake to ensure the validity of the data and associated changes. The project has recently turned to the oracle space, using its database core to provide additional functionality over existing solutions like Chainlink (LINK) or Band Protocol.
The team says that its solution includes historical data that can be requested on-chain and used to perform statistical analysis on prices. This can help make markets and their price data more resilient to manipulation, as smart contracts can use the historical data as a sanity check on current prices.
Bluzelle runs on a blockchain built on Cosmos, with a claimed 10,000 transaction per second throughput, which it says makes it cheaper than competing solutions built on Ethereum.
Bluzelle CEO Pavel Bains told Cointelegraph that the consensus infrastructure is remaining on Cosmos. The Polkadot collaboration will involve building “a bridge to Polkadot as part of their select builders [program],” Bains said.
Bluzelle’s databases and oracles would be made available to all projects building on Polkadot’s Substrate framework, he added.
Nevertheless, the integration is still in a preliminary phase, Bains noted, “At this time there is not anything built to show. It’s early stages. We are working with a number of DOT projects already.”
The integration comes as Polkadot keeps pushing heavily for building DeFi infrastructure on its chain. Bluzelle would come as an additional oracle provider as Chainlink was previously adapted to Polkadot by the Parity team.
Polkadot is already seeing several DeFi projects from other chains setting up shop, while new concepts like liquid staking are being tested on Polkadot first.
Nevertheless, some DeFi experts argue that the success of Polkadot DeFi relies on creating bridges to Ethereum liquidity. Cointelegraph previously reported of one such bridge initiative spearheaded by Snowfork.
Polkadot maintains an interoperability-centric vision that encourages bridges to other blockchains, and some of that can be seen in the decision to collaborate with Bluzelle — a project built on what is arguably Polkadot’s closest competitor, Cosmos.
Orchid Adds A New ‘Secret Shopper’ Oracle For Greater Transparency
Picking Chainlink over its competitors was an easy decision for Waterhouse.
Decentralized VPN Orchid is adding a Chainlink oracle that, like a “secret shopper,” samples bandwidth pricing from all the providers in the network.
Orchid co-founder Steven Waterhouse explained the importance of this feature, stating, “The basic idea is in decentralized services like Orchid, where we have a decentralized VPN, there’s no way of really knowing exactly [how much a provider might charge]. A provider might say they’re charging a certain amount, we don’t really know until you try it. So we wrote some code that in a decentralized fashion, shops for bandwidth on the network.”
He said that in the future, this may lead to new features being added, such as the ability to track the uptime of bandwidth providers. Waterhouse also said that choosing Chainlink over other oracalized data providers was easy, since his relationship with the project’s co-founder Sergey Nazarov goes back to 2014.
When asked whether the pandemic has had a positive impact on the demand for VPN services, Waterhouse stated that it is difficult to judge, with Orchid being a new business:
“I am definitely conscious of the fact that there’s an overall demand for privacy services as more people are working at home and also as people are starting to become more aware of some of the issues that are going hand-in-hand with potentially increased tracking and surveillance of people in global pandemics are also in terms of you can change.”
Waterhouse was a founding partner of Pantera Capital, one of the first crypto investment firms in the world. Regarding the recent DeFi boom, he is convinced that people are “risking capital on unaudited contracts and anonymous teams and so on.” He did admit that he was excited about the launch of the Uniswap’s UNI token, stating, “I think that that’s a great team and it’s good to see what can be done with a solid team behind.”
Chainlink has recently acquired a privacy-preserving protocol, DECO, from Cornell University, which should make its data more secure.
Earlier today, Binance also announced its decision to list Orchid’s native token (OXT) for trade.
Polkadot’s Substrate 2.0 Integrates Oracles At A Protocol Level
The blockchain can now see its environment.
The Polkadot team released on Wednesday a major milestone for its Substrate blockchain framework, which now provides a way for blockchain applications to interface with the outside world without relying on external oracle providers.
Substrate is the name used for Polkadot’s blockchain building framework. It provides developers with a variety of tools to design their custom blockchain for a variety of possible applications. The blockchains can then be launched stand-alone or integrated in Polkadot’s network of shards, or “Parachains.”
The most important feature of Substrate 2.0 is the “off-chain worker,” a development module that lets blockchains perform advanced computations or make their own web requests to the outside world.
Off-chain workers leverage Substrate nodes to perform operations that would normally be outside of the blockchain’s capabilities. In a blockchain like Ethereum, a particular computation has to be quick and limited enough to fit into a block of instructions.
This excludes many types of operations that are either non-deterministic — for example web requests that may fail — or are just too complex for the resources available. Substrate 2.0 allows developers to unload these operations to the nodes running the network, which are able to perform web requests, encryption and decryption, signing of data, random number generation and other CPU-intensive tasks.
This system would allow Polkadot developers to build complex systems like price feed providers entirely on-chain, removing some of the elements of trust involved. The issue of finding reliable data sources — the core of the “oracle problem” — would still remain, but developers would have maximum flexibility in the design of their DApps and blockchains.
By contrast, oracle systems like Chainlink have their data gathering logic entirely off-chain. Smart contract developers can only access the final data submitted by the oracles, necessitating a certain degree of trust in these providers that these types of solutions try to minimize.
Substrate 2.0 also introduces a variety of other developer-friendly tools in the form of Pallets, configurable modules that greatly simplify certain actions. For example, the “Democracy” pallet provides a simple way to introduce on-chain voting, while the “EVM” pallet replicates Ethereum’s Virtual Machine to let developers port its smart contracts to Polkadot.
While Substrate appears to be a significant technological leap forward over some existing solutions, it remains to be seen if developers and users will make the jump to Polkadot. The Web3 Foundation, which supports Polkadot, has been busy funding teams to build the infrastructure of the blockchain, ranging from bridges to Ethereum and other blockchains to in-house decentralized finance projects.
A key part of Polkadot’s value proposition is sharding, which would let Substrate blockchains communicate with each other. However, cross-shard communication is still at the testing stage.
Chainlink Up 30% Following Six-Week Downtrend And Developer Selloff
A Chainlink developer address appears to have been offloading tokens and putting downward pressure on prices. But things are looking up.
Following a six week downtrend from its all-time high, LINK has rebounded 30% in the past 24 hours after a reported developer selloff resulted in downward pressure on the oracle protocol token’s price.
The strong rebound in the Bitcoin price, a sea of green among DeFi coins and a new Chainlink partnership announcement have all contributed to the price increase.
Chainlink’s native token had fallen over 60% from its peak of $20 mid-August, bottoming out at crucial support levels around $7.50 on Thursday, September 24. The six week downtrend appears to have been been accelerated by multiple sales of large chunks of LINK from what UK crypto publication Trustnodes reports is the dev address.
This ‘dev address’ has been selling batches of 500,000 tokens, worth approximately $4.8 million per batch at current prices, regularly over the past six months. The frequency of sell-offs increased after LINK hit its all-time high last month. The address shows several outflows to a Binance address but then the trail goes cold.
There are around 26 million tokens remaining in this address, worth an estimated $258 million at current prices.
Since its peak, LINK market capitalization has declined from more than $7 billion to around $3 billion currently, however it remains one of the best performing crypto assets this year surging over 1000% from January 1st to its all-time high. At current prices, it is still up 450% since New Year’s day.
The selloff has dropped prices back to a crucial support level and the ‘Link Marines’ appear to have chosen this point to load up again. The $7 to $8 price zone was where LINK held in July before its epic run up to $20. A return to that level this week has catalyzed buying pressure as traders eyed a long overdue bounce yesterday.
That bullish momentum mounted resulting in a surge of 30% in less than 24 hours as LINK prices topped out at $10 a few hours ago. Since then, prices have retreated a little and are currently hovering around $9.80.
The price bump came hours after Chainlink announced a partnership with travel company Travala.com. LINK has been integrated as a payment method on the crypto friendly hotel booking platform and token holders can book accommodation in over 2.2 million hotels and homes in 230 countries.
Bitcoin’s momentum may have also had an effect. The king of crypto is well known for its capacity to move the rest of the market and it too bounced off support at $10,250 with a gain of 5% in push to $10,750 over the past 24 hours.
Chainlink’s Sorry September Returns Shows DeFi Hysteria Deflating
That was the story in cryptocurrency markets in September as prices tumbled for digital tokens from “decentralized finance” (DeFi), the fast-evolving arena of blockchain-based lending and trading platforms.
Chainlink, which supplies data feeds to DeFi systems, saw its LINK token fall 42% month to date, the worst return among digital assets in the CoinDesk 20.
The DeFi market correction came at a time when traditional markets also were hit hard by growing anxiety over the increasingly contentious U.S. presidential elections in November and resurgent coronavirus cases in the U.S. and Europe, according to Anil Lulla, co-founder of the cryptocurrency research firm Delphi Digital.
It was a reality check after DeFi’s ebullient August during which traders speculated that the emerging sector would reap fast revenue growth buoyed by well-received debuts of DeFi protocols. Tokens mooned from Aave’s LEND to Yearn.Finance’s YFI and Spaghetti’s PASTA. Total collateral locked in DeFi rocketed to $9 billion at the end of August from $2 billion at the start of July. It is currently at $11 billion.
The slowing rate of growth in September translated to a sell-off in DeFi tokens.
“If you look at August, crypto came off probably with one of the best months of performance ever,” Lulla said. “So I don’t think it’s unusual to see a breakdown, a little dip like this.”
The DeFi tokens’ monthly swings were bigger than for bitcoin (BTC), which slid 7.9% in September, after a 2.6% rise in August.
Matthew Hougan, global head of research at Bitwise Asset Management, noted that LINK’s decline followed a 10-fold rise in the 12 months through August. The token is still the best-performing digital asset the CoinDesk 20, up 458% year-to-date.
“That’s the crypto shuffle,” Hougan told CoinDesk in an email. “I don’t think anything has fundamentally changed about the story or the investment case. The DeFi market got a little bit ahead of itself and now it’s resetting.”
CoinDesk’s Zack Voell reported Tuesday that some crypto traders are shifting funds from alternative tokens into bitcoin in a bet that the largest cryptocurrency, with a market capitalization of about $200 billion, might prove a better bet over the next several months. And CoinDesk’s Omkar Godbole reported that data from the cryptocurrency options markets suggest that ether, the native token of the Ethereum network which serves as the backbone of DeFi, might start to take its cues from bitcoin’s price direction.
Bitcoin closed Tuesday at $10,836, setting a record of 65 consecutive daily closes above $10,000, the longest period in history.
The Norwegian crypto research firm Arcane Research also noted that the number of daily active addresses on the Bitcoin blockchain surged last week to its highest level since January 2018.
“This is a healthy sign and shows that the adoption and use of bitcoin is increasing,” the newsletter wrote.
– Muyao Shen
$1B in Wrapped Bitcoin Now Being Audited Using Chainlink’s ‘Proof of Reserve’
Wrapped Bitcoin is now even safer with Chainlink oracles checking custody wallets every ten minutes.
Wrapped Bitcoin custodian BitGo has adopted Chainlink’s Proof of Reserve mechanism in order to boost the transparency and auditability of the tokenized asset for DeFi protocols.
The functionality, which is currently live on testnet, enables Ethereum-based dApps to completely automate the burden of auditing wBTC. The move comes as the amount of Wrapped Bitcoin on Ethereum approaches $1 billion in value, or the equivalent of over 92,500 BTC.
The mechanism negates the need to rely on manual off-chain processes such as audit reports. It streamlines the process in a trustless and censorship resistant manner which gives further credibility and security to the tokenized version of Bitcoin.
Wrapped Bitcoin custodian BitGo announced the Chainlink collaboration on Oct. 1, adding this meant DeFi applications could now receive definitive on-chain proof regarding the fully backed collateralization of wBTC.
The Proof of Reserve contract will access a decentralized Chainlink oracle to check the balances of BitGo custody wallets for wBTC every ten minutes, which is the average time between BTC blocks. If there is a deviation from a set threshold the oracle will push an update on-chain to reference the new balance.
Chainlink nodes will continually monitor the contract off-chain, but only update it on-chain when events change the balance such as the minting or burning of wBTC. User funds can also be protected — for example, a money market can check wBTC collateralization before executing a lending or borrowing action. The announcement added;
“This feature can be especially beneficial for decentralized applications that utilize wBTC as collateral to secure other digital assets.”
This has the overall effect of increasing user trust in the asset and protecting against unexpected events in decentralized finance markets. Chainlink protocol co-founder, Sergey Nazarov, told Forbes;
“I think the concept of Proof of Reserve generally is really about proving that an underlying asset somewhere is in a certain state. And that proof is actually very fundamental to how financial systems work.”
He used the 2008 financial crisis as an example of how there was a disconnect between the actual underlying value of an asset and the market.
Bitcoin in its native form doesn’t work well with DeFi which is largely Ethereum based. Wrapping it, or tokenizing it in ERC-20 form, has become immensely popular this year as yield farming opportunities have emerged on an almost daily basis.
According to btconethereum.com, there is currently 125,300 BTC, or $1.33 billion worth, tokenized for use on Ethereum. Of this total, which has increased by 970% over the past three months, wBTC accounts for 76%.
Chainlink Brings Verifiable Randomness To Ethereum Mainnet, Keeps Other Chains In Sight
Sergey Nazarov: there is a demand for Chainlink VRF from other chains like Matic.
Chainlink’s verifiable randomness function, or VRF, has made its way to the Ethereum (ETH) main net. VRF will provide a decentralized source of randomness for the project’s decentralized ecosystem.
A trusted source of randomness is essential for many applications, such as those in the gambling and gaming industries. Chainlink’s co-founder Sergey Nazarov told Cointelegraph that many blockchains beyond Ethereum, such as the gaming-focused Matic Network, are interested in deploying the project’s VRF:
“I know that we have anywhere between 10 and 20 users announced as already using it from the time it was in testnet only. And I know a number of people have already used it for one or two things on mainnet. And I also know that a number of the chains that we’re integrating into, interestingly enough, whether they’re gaming-focused or not, already have people lined up to use it when we’ve finalized our integration to that chain.”
As with the function’s testnet deployment, the first use-case of VRF on the Ethereum mainnet is a gamified application that incentivizes users to save money called PoolTogether. Its co-founder, Leighton Cusack, shared his thoughts on the importance of having a trusted source of randomness:
“The V3 PoolTogether Protocol creates a true “money lego” for no loss prize games. An essential component of this is generating randomness. Using Chainlink VRF lets us move away from a less secure and centralized system to a decentralized one.”
VRF is a computationally intensive application which is more costly in terms of Ethereum fees than regular Chainlink oracles. According to Nazarov, the team has been working on VRF for a couple of years. He noted that a lot has changed in the Ethereum landscape during that interim:
“But then the gas price dynamics were very different and there were a lot more games on Ethereum. So interestingly enough, I think what’s going to happen with Chainlink VRF, it’s now going to successfully launch with a number of users on Ethereum mainnet. But those are the users that are still on Ethereum for gaming. And many users for gaming have now started to move to other more gaming-specific, which is then also where we’ll have Chainlink VRF soon as well.”
Integration with other EVM-compatible blockchains is relatively straightforward for Chainlink’s VRF, said Nazarov. He believes that, though the initial adoption of this technology will come from the blockchain space, sooner or later it will bridge into other industries.
At the moment, many of these already employ their own reliable methods of generating randomness, and are not especially eager to go through the hurdles of adopting a decentralized alternative. Nazarov supposed that a major scandal could change all of this:
“Once in a while in the gaming industry, you see these kind of flashes of concern from users, you see some gaming sites somewhere frontrunning users from inside the gaming site, or you see a scandal with some gambling thing that’s regulated but some employee still was playing the game and they still were able to win against other players. And I think whenever those happen, those bigger firms do start to seek additional solutions.”
‘Where Are The LINK Marines?’ Chainlink Beats Bitcoin With 610% YTD Returns
Chainlink delivers easily the best year-to-date returns in 2020, but Bitcoin is still down the least against its all-time highs.
Bitcoin (BTC) may be down less from its all-time highs than any other cryptocurrency, but 2020 has so far been the year of Chainlink (LINK).
In the latest edition of its Weekly Insights report on Oct. 26, The TIE noted that Chainlink has outperformed every other cryptocurrency with year-to-date returns of over 600%.
Bitcoin Down Least Vs. All-Time Highs
Comparing altcoin performance, the report also highlighted Cardano (ADA) with 224% returns, Ether (ETH) on 217% and Monero (XMR) on 182%.
The numbers provide a timely counterpoint for cryptocurrency spectators as attention remains broadly focused on Bitcoin and its recent gains, which topped out at $13,370 over the weekend.
Enthusiasm around a rerun of the so-called “altseasons” from previous years has also waned, with Cointelegraph Markets analyst Michaël van de Poppe warning that Ether may not be set to copy Bitcoin’s successes this time around.
Zooming out, Bitcoin remains the cryptocurrency down the least versus its historic all-time highs, at press time circling 36% against its $20,000 peak from late 2017.
By contrast, Chainlink is down 41%, Ether 73% and Cardano 92%. The worst performers out of the major market cap tokens are Ripple (XRP) and Bitcoin Cash (BCH), both down 94%.
“Among the major cryptocurrencies, Binance Coin, Bitcoin and Chainlink are closest to their all-time high prices. While the median asset is down -79% from its ATH, BTC is down -36%,” The TIE summarized.
“That means that Bitcoin’s price would need to increase by +55% (roughly $7,000) to reach its ATH price. It has been almost 3 years since BTC was at $20,000.”
“Where’d all the LINK Marines go?”
The TIE meanwhile noted that despite its 2020 rally, Chainlink is noticeably absent from social media.
“Like many assets, Chainlink recently set it’s all time high during the summer’s altcoin craze and has fallen a considerable amount since then. This has caused LINK related conversations on Twitter to decrease by -60%,” the report stated.
“This decrease in conversations has continued on, despite the fact that LINK has rebounded 70% from its low. So, this brings me to my question of where’d all the LINK marines go?”
Google search data for Bitcoin meanwhile has trended slightly up over the course of recent price rises, but remains lower than in August when it returned to $12,000.
Razor Network Raises $3.7M to Prove There’s Room for More Oracles In DeFi
Decentralized oracle platform Razor Network has raised $3.7 million in a seed funding round from NGC Ventures, Alameda Research, Spark Digital Capital and private investors including Mariano Conti, former head of oracles at MakerDAO.
“Mariano really understands what we’re doing,” said Razor Network founder and CEO Hrishikesh Huilgolkar in an interview. “He probably created the first oracle to ever go into production so he’s quite a good addition to our team.”
Huilgolkar, who was a software engineer at ConsenSys the past four years, acknowledges that most oracles systems today are centralized systems, which suffer from the usual problems associated with having a single point of failure. Of the current decentralized options, Chainlink has surged in popularity in recent months, with Decrpyt reporting this week that 29 projects integrated with Chainlink oracles last month alone.
“The oracle is arguably the most important piece of any DeFi application,” he said. “More importantly, the oracle needs to be fully permissionless to be secure.”
But is there room to compete with Chainlink in the current market?
“There are so many different types of attacks on oracles we have to take into account and that’s the scary part,” Huilgolkar said. “For example, Chainlink got attacked a couple of months back and the validators lost a quarter-million dollars. We have to make sure that doesn’t happen and everyone is protected.”
Huilgolkar said the Razor team is building towards a “truly decentralized oracle solution” with the new funding. He added that Razor developers have designed a dispute-resolution mechanism so that in the case of an attack, the attacker is sure to lose in the dispute round. This, he says, solves for the trade-off between speed and security of a fully decentralized system.
Razor Network is set to launch in 2021 for developers to create “state-of-the-art dapps,” the firm said in a press release. Huilgolkar also said the upcoming launch of the first phase of Ethereum 2.0 “will actually make our job a lot easier.”
‘Chainlink Killer’ API3 Closes $3M Funding Round With Placeholder And Pantera
When it comes to solving the so-called “oracle problem,” or the way blockchains are connected to outside data sources, we can do better.
So says API3, a project building a transparent methodology for marrying blockchains to the APIs of data providers, which really means providing an alternative to Chainlink, the decentralized oracle service with something of a monopoly in the world of data feeds and smart-contract blockchains.
Announced Thursday, API3, which promises a decentralized API (dAPI) network, has raised $3 million in a private funding round led by Placeholder and with participation from Pantera, CoinFund and Digital Currency Group (which is also the owner of CoinDesk).
Because blockchain nodes are consumed with the business of reaching consensus, they must obtain outside information via oracle nodes, a sort of middleware between the ledger and the API of some data provider. According to Heikki Vänttinen, co-founder of API3, this intermediary function is handled by rent-seeking middlemen who run nodes on Chainlink, which in turn operates an opaque system of governance.
A better solution is to allow API providers themselves to run their own nodes, said Vänttinen. That way, the process of governing the curation of data feeds can be done in a transparent and decentralized manner.
“We just saw some shortcomings in the way they [Chainlink] basically operate their data feeds on the oracle network as a whole,” said Vänttinen, who was one of the first Chainlink node operators. “The core team is this sort of centralized black box for the data feeds, deciding unilaterally which nodes get to serve which data feeds and also which APIs those nodes serve data from,” he said.
Placeholder’s Chris Burniske turned up the heat.
“Crypto’s largest oracle system by network value, Chainlink, is composed of data-reselling middlemen, where the source and quality of data are suspect,” he said in a statement. “While heavily marketed, Chainlink isn’t well enough designed or maintained to remain a long-term solution for crypto or DeFi’s information needs, and those that rely on Chainlink do so at their own users’ risk. Enter API3.”
The Chainlink Advantage
However, a Chainlink Labs spokesman said a quick look at one of the widely used feeds like ETH/USD, shows multiple leading data providers, such as Kaiko, running their own nodes.
“The Chainlink system possesses a key advantage,” the spokesman told CoinDesk via email. “It enables data providers to sell their data to multiple blockchains without the need to run any additional software. Chainlink not only enables data providers to run their own nodes, and many already do on production today, but also enables them to sell their existing APIs into the Chainlink Network with zero changes to their infrastructure.”
This purposeful design decision provides Chainlink users access to a broader selection of data providers, the spokesman said, adding:
“It’s a starkly different improved approach from that of API3, which requires all data providers to operate and manage new infrastructure to even get started. Chainlink’s origin-signed data capabilities are complemented by the even more important capability that allows smart contracts to access any and all APIs, a key feature API3 clearly lacks.”
Vänttinen says the API3 approach makes it painless and easy for API providers – from crypto-price crunchers to weather forecast APIs that plug into insurance apps – to set up as oracles.
The API3 Airnode is “a very simple serverless function that the data provider can deploy on their existing cloud provider platform – you set it and forget it,” said Vänttinen. Alternatively, running a Chainlink node is “basically a full-time job” to keep operational, he said.
Chainlink pointed out that since API3 removes the reliability of having each oracle running its own full nodes would make this approach highly susceptible to things like the recent Infura downtime event.
“API3 doesn’t have oracles that run their own Ethereum or other nodes, which means they are forced to rely on centralized third parties to broadcast their results,” the Chainlink Labs representative said.
“This means that API3 is entirely dependent on services like Infura being live, which as we’ve seen recently, can fail for hours at a time, which in API3’s case, would lead to hours of downtime, out of sync market prices and therefore massive losses for users.”
The recent DeFi boom saw Chainlink node operators cashing in. For example, the monthly subsidies earned by each of the top three Chainlink node operators was close to $100,000 per month between August and October this year.
According to research carried out by The Block, between August and October, ChainLayer made over $322,000, LinkPool over $306,000, CertusOne over $293,000 and Fiews over $282,000. September was a particularly good month for them, as the top three nodes all made over $160,000 in said subsidies.
By contrast, the API providers are paid a couple of orders of magnitude less and don’t even know their data is being resold in these applications, said Vänttinen.
The monthly subscription fees paid to those providers by node operators could range between $100-$200 per month, perhaps running as high as $400, Vänttinen said, adding that the terms and conditions of these subscriptions usually prohibit the third-party reselling of data.
“With its Airnode design, API3 makes it seamless for primary data providers to pipe their information into cyptonetworks with zero blockchain expertise,” said Burniske. “That means the reputation and quality of existing data providers can carry into cryptoland, simultaneously allowing these entities to turn a profit from crypto participation.
“Furthermore,” he said, “API3’s organizational DAO structure provides a framework for truly decentralized on-chain data feeds, which the team calls dAPIs.”
Matic Becomes The First Outside Ethereum To Launch Native Chainlink Feeds
Five price feeds will be directly published on Matic mainnet.
Matic Network, a smart-contract platform acting as both a layer one and layer two for Ethereum, announced on Thursday the full launch of five Chainlink price feeds that are set to power its ecosystem.
Though there are many promised or existing Chainlink integrations outside of Ethereum, the majority of them are still in development or are indirectly using Ethereum feeds.
Matic now features five price feeds: MATIC/USD, USDC/USD, ETH/USD, USDT/USD and DAI/USD, promising that more will come later.
Chainlink’s Verifiable Randomness Function is set to be integrated soon as well, which would allow Matic app developers to build provably fair chance games or other integrations.
The team said that the integration will be crucial for decentralized finance developers wishing to build on Matic, pointing to several projects, such as EasyFi and PlotX, that already committed to using Chainlink oracles.
The race for layer-two scaling to power the next cycle of DeFi adoption often sees Rollup-based projects as the favorites. Sandeep Nailwal, co-founder of Matic Network, told Cointelegraph that Matic’s hybrid approach is already generating interest, despite many being critical of Plasma as a solution for smart-contract scaling:
“The viability of Plasma for DeFi is a hotly debated topic but there is no other Plasma implementation in production apart from Matic. And turns out that in production it works fine and has not encountered any issues after 4+ months of launch of mainnet.”
He argued that the flexibility of Matic, letting developers choose between Plasma and proof-of-stake, can entice different types of developers. “Many apps like Games, VR spaces use pure POS while some DeFi and prediction markets choose Plasma,” he added.
Like other layer-two solutions, Matic supports Ethereum tooling and allows developers to “simply pick up their Ethereum smart contracts and deploy it on Matic sidechains within a matter of minutes,” Nailwal said.
While Matic has been somewhat left out of mainstream comparisons, direct support from Chainlink can strongly contribute to further adoption. “We believe Chainlink’s decision to build on Matic was rationalized on the basis of where the greatest demand for its services lies,” Nailwal continued.
The number of prediction markets building on the platform, which have a particularly pronounced need for reliable price information, likely contributed to the decision to integrate Matic, he concluded.
Polkadot Launches DeFi Alliance With Chainlink And Will Let 1000 Nodes Bloom
Polkadot is making moves to expand its ecosystem, announcing a new DeFi Alliance alongside a new support program for validators.
Polkadot has become the latest Ethereum competitor to launch a decentralized finance alliance.
Announced on Dec. 3, the alliance aims to overcome the decentralized nature of the Polkadot ecosystem, providing a platform for its community to discuss using the Polkadot Network and its underlying Substrate technology stack for DeFi.
Oracle network Chainlink is among the alliance’s founding members. The company’s global head of business development, Dan Kochis, said:
“Chainlink is excited to help steer the direction of Polkadot’s growing ecosystem of decentralized financial applications. By promoting developer best practices for DeFi protocols, the Polkadot ecosystem can become stronger than ever.”
Other founding members include layer-two technology provider Plasm Network, decentralized insurance market Tidal Finance, and non-custodial automated market maker Polkaswap.
The alliance is currently accepting applications from developers building on Polkadot Network or Substrate.
Polkadot has also just announced it will be launching a “thousand validators” program this month, which will offer support and incentives to individuals seeking to run a Polkadot node in a bid to bolster the number of its validators by 1,000.
The program draws on the same program that was launched on Polkadot’s sister network and parachain Kusama in February. While Kusama’s node count was approaching 180 in February, the network now has 700 active validators with a further 393 waiting.
Despite two-thirds of Polkadot’s supply being staked, the network currently comprises just 249 validators — indicating that many stakers are choosing to use third-party service providers.
How Chainlink May Recover Despite LINK Price ‘Death Cross’
LINK, the native token of Chainlink, is beginning to recover after seeing a major drop against Bitcoin.
The price of LINK, the native cryptocurrency of Chainlink, has increased by 10% in the past three days with the recovery coming despite a “death cross” on the LINK/BTC chart.
Josh Olszewicz, a cryptocurrency trader and technical analyst, said the LINK/BTC chart encountered its first death cross since 2018.
What Is The Death Cross And Why Is Link Seeing A Relief Rally?
In technical analysis, the term death cross is a candle chart formation that occurs typically before a large selloff. It lights up when an asset’s short-term moving average falls under its long-term moving average.
This formation normally indicates a short-term trend reversal as it tends to emerge as an asset sees a steep correction.
From Nov. 23 to Dec. 11, the price of LINK declined by around 30% within 17 days. Due to its sharp short-term drop the death cross appeared on the LINK/BTC chart. LINK’s short-term moving average fell under its long-term moving average for the first time in two years.
But a relief rally becomes likely if an asset begins to recover strongly from the death cross. Since the indicator appears after an asset sees a major pullback, the probability of a large short-term uptrend also rises as the death cross materializes.
On Dec. 13, buoyed by the recovery of the decentralized finance (DeFi) market, LINK posted a 10.5% rally within 12 hours. LINK has been consolidating since then, but the initial relief rally could lead to a broader uptrend if LINK price remains above the $12.3 support level.
Chainlink Fundamentals Still Strong
At its core, Chainlink is an oracle network that provides relevant market data to DeFi applications.
Most major DeFi protocols rely on Chainlink’s oracles to fetch information that is used across lending and other financial applications.
Ryan Selkis, the founder of Messari, noted that oracle infrastructure is highly important for DeFi. Albeit its valuation remains high, Selkis said that he acknowledges the importance of data for DeFi. He said:
“Though we don’t think LINK is DeFi, oracle infra is critically important (and frequently exploited). Chainlink kills it on the partnerships front. I don’t grok the economics at $10bn, but I do get the importance of reliable DeFi data pipes.”
One of the major catalysts for LINK is its continued partherships and collaborations in the DeFi space. In the past two days alone, Unilayer and Dock integrated Chainlink’s oracles into their DeFi platforms.
Most notably, Binance Chain integrated Chainlink’s oracle network on Dec. 10, allowing all decentralized applications on the blockchain to use Chainlink. A Binance blog post read:
“Binance Smart Chain (BSC) has successfully integrated the Chainlink decentralized oracle network on its mainnet as its recommended oracle solution. As a result, Chainlink is now available for use by any and all BSC smart contracts.”
‘Be My Santa, Please’ — Chainlink User Offers $13K Reward To Fix $50K Mistake
“I have already done hundreds of transactions on the ETH chain and by one oversight, rush, and my son’s lessons, I lost my life savings.”
According to a Github post made today, user dawidkabani13 claims to have accidentally sent 4,005 Chainlink (LINK) — $53,226 at the time of publication — to an Aavegotchi (GHST) smart contract on the Ethereum blockchain, which does not support operations for the token. The user said the contract is immutable — meaning his funds likely can’t be recovered. Even so, he is offering a 1,000 LINK reward to anyone willing to help. At time of publication, this reward would be worth approximately $13K.
“I’m just recovering from a terrible loss, I’m a father and husband, and a few days ago I lost my life savings due to one small mistake and rush,” said Dawid. “When I launched the rescue operation, good people came to me who said that there should be a chance to add a LINK sidechain to it, which would allow me to recover all my life savings.”
The smart contract’s author, Nick Mudge, said that the GHSTStakingDiamond to which the user sent the funds was “not upgradeable” and the tokens were likely “going to be stuck in the [Ethereum] diamond forever.” Both Mudge and Dawid have since called on Ethereum co-founder Vitalik Buterin to “hard fork and reverse the transaction.”
@VitalikButerin be my Santa Please. I have already done hundreds of transactions on the ETH chain and by one oversight, rush and my son’s lessons (f * COVID) I Lost my life savings sending all my funds to a non upgradeable smartcontract.
Aavegotchi has also responded to the incident, saying reversing the transaction may not be “amendable on a technical level.” However, the firm set up a donation page to hopefully help Dawid recover some of the funds before the holidays. At the time of publication, users have sent roughly $1,179 in Ether (ETH).
“On Christmas day we will be transferring whatever has been deposited in this wallet to Dawid, a father, GotchiGang member and Link Marine,” said Aavegotchi.
Unfortunately, the immutability of many crypto transactions make such occasional errors like this inevitable if users aren’t careful. In May, Cointelegraph reported that an Ethereum user claimed to have lost 40 ETH — $25,000 at the time of publication — as a result of a single mistaken alphanumeric character entered into the receiving wallet’s address.
‘Christmas Magic,’ Says Chainlink User Who Received $11K In Donations For $50K Mistake
Aavegotchi sent the crypto user donations from more than 200 deposits for Christmas Day.
A crypto user who lost roughly $50,000 from a smart contract mistake before the holidays is thanking the crypto community for donating $11,000 to help recover the loss.
Earlier this month, Github user dawidkabani13 said he had accidentally sent 4,005 Chainlink (LINK) — worth roughly $47,000 at the time — to an immutable Aavegotchi (GHST) smart contract on the Ethereum blockchain.
He immediately realized that it did not support operations for the token and reached out to the crypto community asking for any and all help to recover his “life savings.” The crypto user offered a 1,000 LINK reward and tagged Ethereum co-founder Vitalik Buterin on Twitter asking if he could personally reverse the transaction.
Aavegotchi responded to the incident by setting up a donation page intended to help Dawid recover the funds before the holidays. On Sunday, the project’s co-founder Jesse Johnson reported that they had sent the crypto user roughly $11,000 in tokens on Christmas Day from more than 200 deposits.
“Though there was no technical solution, we realized a charity in the Christmas spirit could be a great opportunity to demonstrate the human side of crypto,” Johnson told Cointelegraph. “It hit very close to home because it’s honestly the kind of simple oversight I can see myself or anyone for that matter making.”
Dear friends, @aavegotchi and #crypto community! Today I am shocked by the support shown to me and my family. The charity received is a really large amount and it will help me get back on my feet. If all these years I could call something “Christmas magic” then this is IT! pic.twitter.com/3Uw7CiMDQm
The missing LINK funds are likely “stuck in the [Ethereum] diamond forever” according to the smart contract’s author, Nick Mudge. The price of the token has also fallen roughly 2.5% since Dawid reported the mistake on Dec. 11, reaching $11.41 at the time of publication.
“The whole crypto community helps me with this, people really want to help me both mentally and financially,” said Dawid two days after making the smart contract mistake. “I met a lot of people who also lost a lot of money in various ways. People are afraid to talk about it because they are ashamed — I believe that it is worth sharing your problem, the vast majority want to help.”
Some crypto users have reported making similar errors over the years, but it’s not all bad news. Though the immutability of many transactions can often result in funds being lost, some help highlight the best of humanity. Last year, a crypto educator in Nigeria returned 7.8 Bitcoin (BTC) — worth roughly $80,000 at the time — mistakenly sent to his wallet.
Warp Finance Adds Chainlink Oracles To Protect Against Flash Loans
Warp Finance’s hack of $8 million could have been prevented with better oracles, the team says.
Warp Finance, a DeFi lending protocol that suffered an $8 million flash loan exploit shortly after release, is now gearing up for a relaunch that will include an integration with oracles by Chainlink.
The inclusion of Chainlink oracles reportedly serves as protection against similar exploits. Flash loan exploits use a feature that allows borrowing an unlimited amount of funds, as long as it is also returned within the same Ethereum block. According to the team, security experts determined that the root cause of the exploit was an exploitable price oracle.
The issue seems to have been compounded by Warp Finance’s use of liquidity provider tokens for collateral. This feature is one of the main selling points of the protocol, as it allows committing yield-bearing tokens as collateral, combining both the yield from trading fees and from borrowers using the protocol.
According to DeFi whitehat hacker Emiliano Bonassi, the exploit relied on the fact that Warp Finance oracles did not properly calculate the underlying value of the pool tokens. The new protocol will use Chainlink price feeds for all critical functions — notably the value of the LP tokens used for collateral.
Chainlink and its founder, Sergey Nazarov, have often been adamant about the fact that price oracles need to cover as much of the market as possible. Indeed, many flash loan exploits are closer to market manipulation than outright software bugs.
Even when no malice is present, incidents such as Compound’s excessive liquidation event in November could have been prevented with more market coverage. Compound relied only on prices from Coinbase and Uniswap, which temporarily posted a highly inflated price for Dai.
When Asked By Cointelegraph Why Warp Finance Did Not Initially Use Chainlink Oracles, A Spokesperson Replied:
“Uniswap oracles have been an option for many projects that seek price feeds for a variety of use cases. As such, we launched similarly to other lending platforms for the trial phase, with the ability to upgrade later.”
The spokesperson further noted that a significant portion of DeFi projects are not using Chainlink, and they believe that the relaunch “gives our users much greater peace of mind about the security of our protocol.”
Warp Finance also drafted a compensation plan for affected users, already having recovered 73% of the stolen funds.
Chainlink Surpasses Bitcoin Cash Making LINK The 8Th Largest Cryptocurrency
The market capitalization of Chainlink has surpassed Bitcoin Cash, as the DeFi market continues to prosper with TVL exceeding $24 billion.
Chainlink (LINK), the oracle-focused blockchain protocol, surpassed Bitcoin Cash (BCH) to become the eighth-biggest cryptocurrency as of Jan. 18.
The market capitalization of Chainlink now hovers at $9 billion and roughly $500 million away from the next biggest crypto asset, Litecoin (LTC).
Why Is Chainlink Surging So Rapidly?
The price of Chainlink rose by 13% in the last 24 hours and the momentum of LINK likely comes from the positive sentiment around DeFi.
The DeFi market as a whole has been rallying strongly throughout recent months with AAVE and SUHI being the most recent standouts. The uptrend can be attributed to the fast-growing metric called total value locked (TVL), which measures the amount of capital deployed across DeFi protocols.
As of January 18, the TVL across DeFi protocols is estimated to be around $24 billion and it is still rapidly growing.
Chainlink benefits from the growth of the DeFi space because oracles feed DeFi protocols with crucial market data.
When DeFi protocols, such as lending platforms or exchanges, fetch price data, they get it from oracles like Chainlink and Band Protocol.
As such, when there are generally more users in the DeFi market, oracles benefit from the increasing TVL of the DeFi market.
Where Does LINK Go Next?
On-chain analysts at Santiment found that dormant tokens are continuing to move. This trend has further fueled the bull trend of various cryptocurrencies, including Bitcoin, Ether and LINK. They said:
“Dormant tokens continue to be moved at rapid rates during this #crypto bull run, and dips in our ‘Mean Dollar Invested Age’ metric indicate the increased rate of $BTC, $ETH, $LINK, $LTC, and particularly $REN (which triggered its massive +60% week).”
With LINK surpassing an all-time high, it is now technically in “price discovery.” In technical analysis, price discovery happens when the value of an asset exceeds its record-high and begins searching for a new ceiling.
In addition to the positive technicals of Chainlink, the oracle provider also does not have many competitors apart from Band Protocol, which is based on the Cosmos blockchain network.
The network effect of Chainlink would likely act as another catalyst in the foreseeable future, especially as Ethereum (ETH) continues to dominate the DeFi space.
Is Grayscale Is About To Unveil A LINK Trust?
Mystery filings using Grayscale’s name suggest the multi-billion dollar firm may be looking to expand the number of Trusts.
Grayscale Investments could be set to launch a raft of new products including a Chainlink Trust, if freshly unearthed filings are to be believed.
According to the State of Delaware’s Division of Corporations, someone set up a Grayscale Chainlink Trust on December 18, 2020.
On the same day, a Basic Attention Token (BAT) Trust, Decentraland (MANA) Trust, Livepeer (LPT) Trust, and a Tezos (XTZ) Trust were also initiated.
Before these communities get too excited, Grayscale Investments is yet to officially confirm it is behind the filings. Some reports have cast doubt on their legitimacy as the registered agent for the Trusts is listed as ‘Delaware Trust Company’ and not Grayscale.
However the Delaware Trust Company is listed on the Grayscale website as one of its official Service Providers and the same details were used for the Grayscale Bitcoin Trust filing in 2013.
Even so, new Trusts are far from certain to launch. Two months earlier in October, a Filecoin (FIL) Trust was created, and this is yet to be made public.
Adding to the uncertainty, a few weeks after the inception of these Trusts, Grayscale CEO and founder Barry Silbert stepped down, replaced by Michael Sonnenshein. It is unclear if Sonnenshein will continue Silbert’s strategy or if he will take the firm in a new direction.
Grayscale last made a filing with the Stellar Lumens (XLM) Trust in October 2018 — more than two years ago.
The Stellar Trust was made public almost six weeks after inception. The majority of Grayscale’s digital-asset trusts are normally made public within days of the legal forming date stated on Delaware’s Corporate Filing website.
The vocal Chainlink army have taken to Twitter to show their support for the filing, speculating what effect this might have on the token’s price.
Twitter user “Bitcoin Collector” stated, “We all know how much purchasing power Grayscale has,” however, he added that the news hasn’t been confirmed.
Chainlink recently passed Bitcoin Cash (BCH) to become the eighth-biggest cryptocurrency with a market cap of more than $9 billion and an all-time high price of $23.30. It has since dropped back to ninth place, losing $2.3 billion in value over a four-day period to trade at $17.8.
Chainlink (LINK) Oracles To Protect Hacks
Soon the end of “flash-hacks” in DeFi? Warp Finance speculates on the nature of the loophole that hackers love to get into.
Chainlink (LINK) is said to be partly the key to the problem.
Better Oracles To Predict Or Prevent A Hack
For the team of Warp Finance, their platform’s $ 8 million hack could have been avoided with better oracles.
The platform Challenge specializing in loan and borrowing protocols had been the victim of a hack carried out through a flash loan, shortly after its launch.
January 8, 2021, Warp Finance announced the release of a new version that will include oracles from Chainlink. Embedding these oracles could serve as protection against similar hacks.
This type of hack uses a feature that allows you to open the credit tap at will, as long as the loans are repaid in the same block Ethereum (ETH). According to security experts, the hacks are linked to abuse of the price oracle.
Manipulators And Not Hackers
The oracle problem appears to have been compounded by the use of liquidity tokens as collateral.
This is one of the peculiarities of Warp Finance which allows to block liquidity-generating tokens and, to combine both the yield of trading commissions and that of borrowers using the protocol.
The security expert Emiliano Bonassi indicated that the hack was possible because the oracles did not correctly calculate the underlying value of the tokens in the liquidity pool.
The new protocol is based on the price flows of Chainlink for all critical functions, including the value of the tokens used as collateral.
The founder of Chainlink, Sergey nazarov, has often insisted that oracles should cover as wide a field as possible.
He believes that many flash loan hacks are closer to market manipulation than software bugs.
Does DeFi therefore suffer from “calculation errors”? Some oracles should revise the math, to avoid 7-digit losses in DeFi.
Chainlink could therefore plug the loopholes in the flash loans at the origin of the hacks. Will Warp Finance’s diagnosis and the advanced solution be taken over by the other DeFi protocols? Hackers will likely test the validity of this hypothesis, which they might view as a challenge to them.
Banks Will Feature Chainlink’s Decentralized Oracles
South Korean banks will now feature Chainlink’s decentralized oracles services according to the announcement made back on Friday, so let’s find out more in the Chain link news today.
Hyperledger based CenterPrime, has to access to the APIs of the top South Korean banks that will now share the data feeds on Chainlink. As a result, the app developers can now source their information from major companies such as the Industrial Bank of Korea and Shinhan Bank. The integration of the first broader baking system as the government pushed previously for wider fintech efforts but none of them involve a public blockchain.
CenterPrime said that they are looking into companies that are able to facilitate decentralized KRW- denominated exchange rates for use in DeFi and Korean Fintech:
“Chainlink has extensive experience building decentralized data feeds, having already created numerous decentralized price reference networks that secure over a billion dollars in value for many leading DeFi applications.”
Top Korean banks: Hana Bank, Shinhan Bank, Nonghyup Bank, and Industrial Bank of Korea select #Chainlink and CenterPrime to bring their forex data on-chain, transforming the capabilities of open banking services, fintech and #DeFi. https://t.co/sMS24ppb1G
“Chainlink has extensive experience building decentralized data feeds, having already created numerous decentralized price reference networks that secure over a billion dollars in value for many leading DeFi applications.”
With the latest partnership, DEXs and Dapps can provide verified forex data in their products and the process can be decentralized totally, opening the market for global access to the blockchain. For now, Chainlink’s price reference feeds will get deployed on Ethereum but this can then be ported to other blockchains such as Chainlink’s. CenterPrime also said that the development will boost DeFi adoption and further development of the sector:
“By opening up access to these key price feeds, we anticipate a major uptick in development within the Korean Fintech and DeFi market.”
They added that the data will be shared on the “public cloud local currency wallet” that can be combined with the Chainlink live price reference data in order to create KRW exchange rates for crypto. The release said that LINK oracles allow for a huge explosion in blockchain-based fintech apps on operating cross-border and DeFi apps that are building homegrown products that are priced in the local KRW currency.
Oracles are finding their place on betting apps, exchanges, and digital identity. The company also received a huge boost last month after the World Economic Forum that selected LINK as one of the latest “Technology Pioneers” for 2020. For the ones that are not into the thing yet, oracles are decentralized data solution that can fetch data from outside the blockchain and get it in.
This is required as blockchain cannot verify the data that only provides storage. Chainlink’s decentralized oracle network ensures that supplied data is accurate and resistant to manipulation that ensures security for the network and if this lapses, there’s a huge chance that users’ funds will be put at risk.
Chainlink Now Bigger Than Litecoin As LINK Price Hits New High Above $24 — What’s Next?
Chainlink has entered price discovery and traders should watch several key levels for the next possible top.
Chainlink (LINK) remains to be one of the best performing cryptocurrencies in the past twelve months. As of Jan. 23, LINK is now bigger than Litecoin (LTC) and now number seven at $9.2 billion market capitalization, after surpassing Bitcoin Cash earlier this week.
The LINK price surge also coincided with rumors this week that Grayscale is preparing to add a Chainlink Trust product. This news event likely played a part in the price of Chainlink rallying toward new all-time highs, making LINK, once again, one of the best performing cryptocurrencies.
What Is The Key Support Level?
The daily chart for Chainlink shows massive volatility in recent months, but also some beautiful price action.
Every previous level of resistance flipped for support, after which the price continued climbing almost in textbook fashion. That’s the beautiful nature of price action and trading in general.
Most people have the impulse to enter a position when the price is soaring. But those support/resistance flips actually give the best entries. Specifically, the first support/resistance flip occurred at the $10 level, after which the same happened with the $13 and $17.30 areas.
Therefore, the crucial level to watch for potentially more downside is the $17.30 area, as well as the $19.50 zone. This latter area is the previous all-time high in 2020 and possibly the point of the next support/resistance flip, which would be bullish for more upside.
Possible Chainlink Price Tops To Watch
As Chainlink is in price discovery, it becomes difficult to define the potential top structures’ next points of interest. The Fibonacci extension tool, however, is quite useful for traders to determine these areas.
Using this indicator, the first zone is between $29-31, which aligns with both of the Fibonacci extensions. The second zone is at the 2.618 Fibonacci extension of $39 and the last one is found at the $42 area.
However, the next impulse wave will likely see a big surge in the Bitcoin (BTC) pair of LINK. The recent run was spearheaded by Bitcoin, while the altcoin-BTC pairs were relatively flat.
Once Bitcoin finishes its correction and starts to move upward in a slow manner, the likelihood of altcoins outperforming Bitcoin increases.
LINK/BTC Meets Big Resistance Zone
The altcoin-BTC pairs have been waking up from their deep slumber in the past weeks, but it can’t really be called an “altseason” just yet. Altcoins must still consolidate and build up strength for the next leg up.
For Chainlink, such an accumulation is shown on the left side of the chart. Chainlink’s price has been acting in an accumulation range for some time before the latest surge started to happen.
For such a big surge to occur, Bitcoin’s price must remain steady. Otherwise, the volatility in BTC will have an even bigger impact on the less-liquid altcoins.
LINK/BTC now faces crucial resistance. If this level at 0.00074000 sats can’t break to the upside, renewed tests at the 0.00055000 and 0.00041000 sats levels are possible.
However, if Chainlink breaks through 0.00074000 sats, continuation is likely toward the next significant zone at 0.00110000 sats. In the USD pair, such a surge would put Chainlink close to the next Fibonacci zone at $39.
Chainlink’s LINK Cryptocurrency Hits New Record Price High
The cryptocurrency is now up 105% since Jan. 1, 2021.
The native cryptocurrency of decentralized oracle provider Chainlink has soared to a new all-time high above $25.
* At around 15:30 UTC Saturday, the LINK (+0.89%) cryptocurrency reached the new record peak of $25.51 following a sharp rise over several hours.
* On Sunday, prices had dropped slightly to $24.80, up 4% over 24 hours, according to CoinDesk’s data.
* The cryptocurrency is now up 105% since Jan. 1, 2021. A year ago, LINK was trading at between $2 and $3.
* Elsewhere in the crypto markets, bitcoin (BTC, +0.22%) is flat on the day at $32,690, while Ethereum’s ether (ETH, +10.12%) is up 6% over 24 hours at $1,343 and approaching its all-time high once more.
The Mayor Of Reno Appears To Be A LINK Marine
It would seem that Mayor Hillary Schieve of Reno, Nevada is a supporter of Chainlink’s blockchain oracle project.
As more jurisdictions explore the potential utility of blockchain technology and cryptocurrency, one American mayor suggested that she backs Chainlink — the most widely used oracle network for powering connected smart contracts.
When Miami Mayor Francis Suarez announced that his municipality’s website would host Satoshi Nakamoto’s Bitcoin (BTC) white paper, Mayor Hillary Schieve of Reno, Nevada asked her colleague when he would become a LINK Marine — a popular term to describe supporters of Chainlink’s oracle network.
“The City of Miami believes in Bitcoin,” Suarez said, adding that he’s “working day and night to turn Miami into a hub for crypto innovation.”
Part of Schieve’s response includes: “When are you going to become a LINK marine?”
Chainlink’s LINK asset has emerged as an influential altcoin in recent months. Ranked seventh by total market capitalization, LINK is positioning itself as a major catalyst for digital-asset innovation and adoption.
Schieve, who isn’t affiliated with any political party, has held the post of Reno mayor since 2014. She also appears to be a long-term supporter of cryptocurrency, going as far as making plans to accept crypto donations during her 2018 reelection campaign:
Her Twitter bio includes: “Passionate about tech, government, and anything entrepreneurial.”
Miami Mayor Suarez has become one of the most vocal proponents of digital assets. As Cointelegraph reported last month, Suarez has been learning more about Bitcoin through influential figures like Tyler Winklevoss and Anthony Pompliano. He called Bitcoin a “stable investment during an incredibly unstable year.”
Chainlink Supporter Deutsche Telekom Has Quietly Started Staking On Blockchains
Never mind bitcoin on the balance sheet, a subsidiary of Europe’s biggest telco is taking a stake in DeFi.
Deutsche Telekom AG, Europe’s largest telecommunications company by revenue, is now one of the main data providers to Chainlink – the omnipresent oracle service on which decentralized finance (DeFi) relies.
Not only that, Deutsche Telekom subsidiary T-Systems Multimedia Solutions (MMS), says it has begun staking on the Flow Network, the ultra-scalable proof-of-stake (PoS) blockchain from CryptoKitties creator Dapper Labs, and has plans to begin staking on several other chains in the near future.
Yes, Deutsche Telekom is providing DeFi data support, and has quietly gone beyond helping with the infrastructure of PoS blockchains and actually started custodying, staking and earning crypto rewards.
But lumbering telco giants are meant to be mired in enterprise blockchain proofs-of-concept, or stuck doing rather dull blockchain-as-a-service cloud offerings, right?
“We started roughly five years ago, like everyone else, doing all those enterprise blockchain proofs of concept,” said Andreas Dittrich, head of the Blockchain Solutions Center at Deutsche Telekom. “But we gradually began to feel we were not focusing enough on public blockchains. This is where digital value will be moved in the future, and it’s really where a telco should be active.”
T-Systems announced it was going to run a Chainlink node back in summer of last year, right around the time DeFi basically exploded. Since then, it’s been “a hell of a ride,” admits Dittrich.
“We were really jumping into something new, providing public blockchain infrastructure and having a token-natured business model on top of that,” he said. “So, of course, we started really small, with few data feeds. But then scaled rapidly, and by now, I think we are among the top three data providers at the moment on the Chainlink network.”
Chainlink’s system of data feeds, known as oracles, pipe information into the blockchain world of smart contracts, eliminating reliance on any single, centralized source.
“We are providing 51 data feeds right now,” said Gleb Dudka, an analyst at T-Systems. “We don’t handpick applications we provide data to, but examples would be Synthetix, a few decentralized exchanges, Nexus Mutual for insurance. The data is mostly digital asset prices, FX rates, and commodity prices like gold, silver, etc., and these mostly go to Synthetix.”
It’s only a matter of time until other big enterprise firms follow Deutsche Telekom’s example and run Chainlink nodes, said the network’s co-founder, Sergey Nazarov.
“Chainlink enables top infrastructure teams like T-Systems to monetize their globally distributed infrastructure and security expertise across the many chains already being served by Chainlink oracles,” Nazarov told CoinDesk via email.
Ethereum 2.0 Staking?
Providing complex infrastructure for the internet is something Deutsche Telekom has done for decades (it’s also worth pointing out the telco has its own cloud offering and so reduces reliance on the likes of AWS). So on the surface of it, there should be nothing surprising about it providing infrastructure support for the incipient “internet of value.”
However, Dittrich acknowledges there’s an interesting blurring of the line between IT services and financial services.
The hardest part was getting this right from a legal, risk management and tax perspective, Dittrich said. T-Systems partnered with Bankhaus Scheich as a broker, and Berlin-based crypto custodian Finoa, one in a slew of German firms waiting in line for a crypto custody license from regulator BaFIN.
“It’s quite a unique thing, because our business model means we need to be able to handle crypto tokens,” said Dittrich. “We need to have them on our balance sheet, various types of crypto tokens. And that’s a hard thing to pull off for a company like us.”
Dittrich said his team has been busy looking at a range of other crypto staking candidates. The elephant in the room in this case has to be Ethereum 2.0 staking, the largest blockchain after bitcoin, which is the first phase of its transformation to PoS.
“We are not doing Ethereum 2.0 staking yet,” said Dudka. The ETH T-Systems buys is needed for Chainlink, he said, and has to be spent in order to sign transactions on the Ethereum public mainnet.
“There are quite a few networks in the pipeline that we plan to go live on,” Dittrich added. “Obviously, the bigger proof-of-stake networks are in there, be that Tezos, Polkadot, Ethereum 2.0, you name it.”
Oracle-Focused Tokens Rally As DeFi Searches For Trusted Data Providers
The DeFi sector is booming but the future of the sector depends on oracles, here are some of the top contenders.
To the observant cryptocurrency enthusiast, the sight of multiple large-cap tokens more than tripling their value since November 2020 is a healthy sign that a bull market cycle is underway.
Aside from a breakout in the price of Bitcoin (BTC), Ether (ETH) and altcoins, every bull market in the crypto sector is defined by one or two key themes that emerge as the driving force of market enthusiasm.
In 2016-2017 there were ICOs, the growing popularity of collectibles like CryptoKitties and the widely held belief that blockchain was a solution to every problem in the world.
In 2021 it’s clear that DeFi is one of the primary drivers of the current bull trend in Ether price and altcoins that embraced the sector. While it may not be in the forefront of every analyst’s mind, the development of oracles is another component that is quietly building the essential infrastructure of the crypto market and many of the projects focused on oracle integration have seen their token prices surge in the past 12 months.
Oracles track, record and securely transmit various forms of data, such as price and trading volume, to different blockchain networks and entities that are interested in the data provided.
Companies like the stablecoin provider Paxos, decentralized exchanges like Uniswap and lending platforms like Maker (MKR) utilize oracles such as Chainlink (LINK) to provide accurate cryptocurrency-related information.
The need for trusted and reliable data is growing in importance as DeFi continues to expand and the total value locked reaches record highs at many platforms.
DeFi Hacks Demonstrate The Need For Oracles
In 2020 multiple DeFi protocols were hacked, costing investors millions of dollars as flaws in unaudited code allowed hackers to have their way with price alterations.
These breaches bring light to the essential tasks of oracle providers, which are to provide reliable, up to the second price discovery data for cryptocurrencies. Having this data come from multiple trusted sources decreases the possibility of manipulation and mass liquidation events like the Harvest Finance exploit where hackers made off with $24 million by manipulating the price of stablecoins on the Curve DAO (CRV) platform.
Making the pricing and data feeds universally consistent or even synchronized is one of the optimal ways to tackle this issue as currently, every oracle is structured differently in how it sources data, comes to a consensus on that data, and how prices are then calculated.
With Bitcoin price continuing to reach for new highs and the DeFi market cap topping $57.45 billion, mainstream investors are becoming much more interested in cryptocurrencies and pricing solutions are needed.
Here are some of the top oracle-focused projects who’s tokens are making strong moves over the past few months.
Chainlink Has The First-Mover Advantage
The most well-known and established oracle project is Chainlink. Arising out of the ICO craze of 2017-2018, the Sergey Nazarov-led project initially raised $32 million to develop a decentralized oracle network comprised of node operators who are willing to provide smart contracts with access to external data feeds in return for a reward in the form of the native LINK cryptocurrency.
LINK became synonymous with DeFi as many of the price feeds that connect separate blockchains and decentralized exchanges utilize its price oracles for price discovery.
Similar to the Coinbase effect, there was a period of time when just the mention of being integrated with Chainlink would provide a brief period of price appreciation as it was seen as a sign of legitimacy.
On March 16 of 2020, shortly after the global financial markets were rocked by the emergence of COVID-19, LINK traded as low as $1.63 after trading at $4.80 just two days before.
Since that time LINKs price has seen a nearly 15-fold increase to a new all-time high of $35.69 on Jan. 23, thanks in large part to the addition of LINK liquidity pools on Uniswap during the 2020 summer of DeFi.
Band Protocol Offers Cross-Chain Data Transfers
Band Protocol (BAND) is a cross-chain data oracle that was originally launched as an ERC-20 token in Sep. 2019 but migrated over to the Cosmos network in June of 2020 with the release of Band 2.0.
The project specializes in aggregating real-world data and APIs, the Band protocol then supplies that data to on-chain applications and smart contracts in order to facilitate the exchange of information between on-chain and off-chain data sources.
In 2020 BAND price has increased from $1.09 to a high of $17.51 in Aug. 2020 before correcting below $10. Currently, BAND trades for $15.90 and on Feb.13 the altcoin hit an all-ttime high at $20.62.
Similar to LINK, BAND token is used as collateral by validators who fulfill data requests and it is the main medium of exchange within the BandChain ecosystem. Oracle nodes on the chain are also involved in the block production/validation process, adding a second role to the important function of relaying data.
In terms of what sets BAND apart from other oracle solutions, that is where the choice to develop on Cosmos came into the equation.
Currently, the team at Cosmos is in the process of developing its Inter Blockchain Communication (IBC) protocol which BAND intends to use for cross-chain data transfers that will support interoperability between blockchains.
Once developed, Band protocol will be able to ensure reliable data feeds on multiple blockchains while also enabling the simple creation of permissionless oracles that allow anyone to begin servicing data requests.
API3 Brings DAO Governance To The Oracles
One of the more recent arrivals to the oracle game is API3, which is a DAO-governed project focused on the creation of fully decentralized, blockchain-native APIs (dAPI). These dAPIs aggregate data from first-party oracles which are “operated by some of the world’s premier API providers,” according to API3s homepage.
API3 sees oracles as a form of middleware positioned between APIs and smart contracts, which leads to increased costs and centralization. The project’s solution is to decentralize this process by enabling API providers to operate their own nodes, allowing smart contracts to establish a direct connection with APIs for the latest data.
Investor desire to play a role in the governance of blockchain projects has also emerged as one of the hot topics in this current bull market and API3 is aiming to capitalize on this growing trend.
API3 token combined with the API3 DAO gives token holders the ability to participate in the governance of the ecosystem through staking tokens in the data feed insurance pool. In addition to the ability to vote on proposals, stakers have access to weekly staking rewards.
Since the public token distribution in early Dec. 2020, the price of API3 has increased by 416% as it rallied from $1.56 on Dec. 31 to a high of $7.86 on Feb.13.
DIA Focuses On Oracles For DeFi
The DIA (Decentralized Information Asset) platform, which sees itself as an “open-source data and oracle platform for the DeFi ecosystem,” pulls data directly from exchange APIs and other public sources to DIA servers and collectes it in a database which is then hashed on-chain.
DIA data streams are available through oracles or APIs providing DeFi protocols and other data providers with plug and play access.
Eventually DIA token will have staking and governance features that will be used to drive the collection and valiation of data. The overarching goal of the project is to become a trusted source of immutable and verifiable data for any market or asset tied to financial institutions.
DIA launched in early Aug. 2020 at the tail end of the first DeFi bull market. DIA got off to a quick start and increased from a low of $0.80 on Aug. 03 to an all-time high of $5.13 on Sep. 2.
Currently, DIA trades for $2.79 after pulling back from its $3.43 monthly high.
UMA Utilizes ‘Priceless’ Derivatives To Create Financial Contracts On Ethereum
Universal Market Access (UMA), approaches the oracle issue differently than the other projects in the space. Its price discovery is obtained through a library of synthetic assets, with any price disputes that arise from registered financial contracts handled by an optimistic oracle service known as the Data Verification Mechanism (DVM).
UMA enables users to design and create self-executing, self-enforcing financial contracts on the Ethereum blockchain which are secured by economic incentives. According to the project’s website, these “priceless” derivatives are “designed to ensure proper collateralization by counterparties without the use of an on-chain price feed.”
When a price dispute is made by a financial contract that is registered on the platform, UMA token holders vote on the value of a price identifier at a historic timestamp through the DVM optimistic oracle service. Token holders who participate in the validation process receive rewards in the form of UMA tokens from the requesting party.
The UMA token is also the governance token of the Universal Market Access protocol, giving token holders the right to vote on changes to the protocol’s parameters and system upgrades.
In early February UMA price went on a tear, rallying 300% from $11.06 on Feb. 1 to a new all-time high at $44.15 on Feb. 4. Since reaching this new high, UMA price corrected sharply to $25 as traders booked profits from the strong triple-digit breakout.
Crypto investors who purely focus on profits would be wise to look beyond the raw price action of trading by technical analysis and keep an eye out for projects that produce value, as they tend to be the most profitable ones.
Oracles are a key piece of infrastructure for the growing DeFi ecosystem and they offer added value through their staking, governance, liquidity pools potential to bring interoperability to siloed blockchain networks.
Online-Trading Platform Will Let Investors Bet On Yes-or-No Questions
Sequoia, Chuck Schwab are among those backing Kalshi, which plans to launch in March.
An online-trading startup that aims to let people wager on questions about future events ranging from economics to the weather to public health has raised $30 million from an array of prominent investors including venture firm Sequoia Capital and discount-brokerage pioneer Charles R. “Chuck” Schwab.
Kalshi Inc. expects to launch in March. It plans to let users bet on “yes” or “no” answers to questions about future events. For instance, had the platform existed last year, it might have asked users whether a Covid-19 vaccine would be approved by the end of 2020.
The San Francisco-based startup hopes to benefit from surging interest in trading by individual investors. Individuals have jumped into stocks and options during the past year, using apps like those offered by Robinhood Markets Inc. Kalshi also hopes its marketplace will be used by people and businesses looking to hedge against risks that they face from future events.
Kalshi’s fundraising round comes after it won approval from the Commodity Futures Trading Commission in November to run a derivatives exchange. Sequoia led the Series A round, which brings the total money raised by Kalshi since its 2018 founding to about $36 million.
Other investors in the round include Henry R. Kravis, the billionaire co-founder of private-equity giant KKR & Co. Inc., and SV Angel, a seed-stage venture firm whose investments have included Airbnb Inc. and DoorDash Inc. Earlier investors in Kalshi include Y Combinator, a Silicon Valley startup accelerator, and Justin Mateen, a co-founder of dating app Tinder.
Despite Kalshi’s high-profile backers, there is no guarantee it will succeed. Many startup exchanges fail to gain traction because it is tough to attract participants to a fledgling market. And event contracts—the type of product that Kalshi hopes to popularize—have had limited success in the U.S. to date.
Kalshi was founded by Tarek Mansour and Luana Lopes Lara, a pair of former researchers at the Massachusetts Institute of Technology. Both are 24 years old. Mr. Mansour has interned at Goldman Sachs Group Inc., while Ms. Lopes Lara has interned at electronic-trading firm Citadel Securities and hedge fund Bridgewater Associates.
Kalshi’s name is derived from the Arabic word for “everything,” which refers to the breadth of topics that its questions could potentially cover.
Mr. Mansour said Kalshi was partly inspired by his experiences at Goldman in 2016, when some clients asked the bank to help them hedge against the risk that the U.K. would vote to leave the European Union. Goldman devised derivatives products that were based on complex models of how various markets would react if Brexit passed. Wouldn’t it be simpler, Mr. Mansour said he thought, if the contracts simply paid out in the event of a “leave” vote?
“A lot of trading activity today stems from an opinion about a future event,” he said. “You form an opinion about a certain future event, and then you figure out, ‘OK, how can I trade on that opinion?’…What Kalshi allows you to do is get the exact hedge, or exposure, that an individual or a business or an institution is looking to get, because they can trade in yes-or-no contracts.”
Kalshi will run an exchange where users determine the price for such yes-or-no contracts. Each contract will pay out $1 if the user is right, and nothing if the user is wrong.
Before the event happens—determining the final, correct answer to the question—the price of a contract could range from 0 to $1, depending on what users are willing to pay for a “yes” or a “no” outcome.
Users don’t have to wait for the final outcome to exit their trades. A user, for example, could initially buy a cheap “yes” contract for, say, 20 cents. Then if there is a shift in the collective wisdom and people begin to expect a “yes” outcome, the user could sell it at, say, 60 cents. Or the opposite could happen, and the user could exit the trade at a loss.
Such contracts could be risky because users may potentially lose all their money if they bet on the wrong outcome. The CFTC has warned investors about binary options, a similar type of contract, in part because of fraud cases involving unregulated online binary-options platforms.
Kalshi says it worked closely with the CFTC to create a regulated market and has safeguards to prevent users from taking on too much risk. For instance, unlike in futures or stock trading, Kalshi users can’t use leverage. In markets that allow leverage, investors can make outsize gains with a small upfront payment, but with the danger that a wrong-way bet will result in steep losses.
Federal law prohibits Kalshi from listing contracts in a number of areas, including war, terrorism, assassinations or gaming. It is up to the CFTC to determine what counts as “gaming”—an area where the law leaves some ambiguity—and the regulator has authority to bar event contracts that it deems to be against the public interest.
It is unlikely that Kalshi would list contracts on election outcomes because in 2012 the CFTC blocked an effort to list political-event contracts, saying they involved gaming and weren’t in the public interest. Mr. Mansour says Kalshi isn’t planning to offer sports contracts.
Alfred Lin, a partner at Sequoia and a Kalshi board member, said Kalshi’s embrace of regulation was one of the reasons his firm invested in the startup.
“They’re taking regulation fairly seriously,” he said. “Companies that move fast and break things are not going to work in this regulated environment.”
Chainlink Rolls Out OCR System Upgrade, Reducing Gas Costs Tenfold
The Off-Chain Reporting upgrade changes how oracles aggregate data, easing the burden on the blockchains.
Chainlink has launched a major upgrade for its oracle network, dubbed Off-Chain Reporting, or OCR. The upgrade was announced on Wednesday, though the implementation has been live for some time already.
OCR changes how data across multiple sources is joined together by the oracle network. Previously, the process of aggregating different readings of the same desired input — for example, a token’s price — was done on-chain.
Chainlink nodes would submit their individual readings of the data, which would be verified by a smart contract on Ethereum and other blockchains. This approach, while guaranteeing the reliability of the data, was inefficient in terms of gas costs, as each node would need to spend resources to publish the data.
The new architecture replaces on-chain aggregation with an off-chain consensus round. The aggregated data is then passed on to the blockchain, where a smart contract verifies that a quorum of nodes agreed on this version of the data.
Sergey Nazarov, founder of Chainlink, told Cointelegraph that the team has been working on the protocol since 2017. “We’ve started to put the best minds behind [it] over the last year and a half and have done substantial multiple audits on it,” he added.
The most immediate effect of the upgrade is reduced gas costs and load on the Ethereum network. According to the team, the upgrade will result in a tenfold increase in the amount of real-world data that could be available on the blockchain. As Nazarov explained, this increase is “partially related” to the gas limitations of the Ethereum blockchain:
“I think the nuance here is that we want to do this in a scalable way, basically, and we want to do it in a scalable way that works for Ethereum and various other chains. What this means is that, in times of congestion, the system should be able to continue to deliver these amounts of data because when you architect a system like this, you don’t architect for the best case.”
Chainlink nodes thus could have chosen to publish more data with the previous system, though the gas costs would have made that significantly difficult. “Our system needs to be able to function even in extreme situations, which so far it has been, better than all other oracles,” continued Nazarov. “So that’s the standard we need to meet.
And if we suddenly increase 10x the amount of data on the current system — yeah, it could work in some good conditions and it would be costly, and it would actually raise everybody’s costs, which is not something we believe in.”
But beyond the immediate effects, Nazarov believes that this upgrade will have more important effects in the future. “Really what you’re seeing here now is the Chainlink network growing into something that is going to do more and more off-chain computation.”
While that does not mean Chainlink will transition to building rollups and layer-two solutions, Nazarov said there are three distinct services that the Chainlink network will soon provide.
This includes verifiable randomness — a feature that has already been launched and that allows DApps to have a trusted source of random numbers, which could be particularly useful for gambling platforms and prediction markets. The other services, enabled by OCR, include keeper functions and fair sequencing, both solutions to very practical problems affecting decentralized finance.
Keepers are a type of maintainers necessary in smart contract environments. For example, some contracts require conducting periodic actions, which are normally triggered by the team or someone in the community, and formalizing this behavior is what projects like Keep3r and Fetch.ai are trying to do.
Fair sequencing is a proposed service that aims to fix front-running and miner extractable value in DeFi. The issue arises when a blockchain operator can freely rearrange transactions to their or someone else’s benefit. For example, when they see a multi-million-dollar swap about to be confirmed on Uniswap, they can quickly place their transaction to benefit from a better price.
The OCR system enables more freedom in how computations are performed on the Chainlink network, enabling new kinds of services centered around computing data instead of publishing it. Nazarov said that these ideas come from very practical needs that are unaddressed in the current market.
“We generally do not want to build the pieces of the stack that we do not have to build,” he said. “We want to be the maximally positive-enabling force for smart contracts, closing all the gaps in the stack that aren’t closed.”
A Dark Horse In The Ethereum Scaling Wars? Chainlink’s Oracles Find Fertile Ground On xDai
Chainlink is rolling out support for xDai, a layer-two sidechain whose perceived centralization hasn’t stopped major DApp players.
Chainlink (LINK) oracles have made their way to xDai, an Ethereum sidechain that has seen growing adoption among DApp developers who cannot afford to stay on the Ethereum mainnet.
As announced by Chainlink on Thursday, its price feeds are live on the xDai mainnet, offering price data for an initial set of trading pairs including LINK/USD, AAVE/USD, DOT/USD and SUSHI/USD. More pairs can be quickly added if there is demand, the company said.
The integration was completed by Protofire, a development workshop and xDai validator. The team received a Chainlink Community Grant to port native Chainlink oracles on xDai, including a token bridge adapter that enables native LINK payments for the oracle’s functionality.
The integration of Chainlink price feeds is the latest in a series of positive adoption news for the xDai project.
The chain was already hosting major Ethereum-based DApps like Perpetual Protocol, a derivatives platform, and Omen, a prediction market developed by Gnosis. The inclusion of native Chainlink oracles removes a major barrier for projects relying on them, potentially opening up xDai for more DApps who wish to escape from the congested Ethereum mainnet.
Decentralization Is Good, But It Won’t Pay For Gas
xDai is a relatively centralized sidechain secured by an independent set of validators. Sidechains are a type of chain where a standalone blockchain uses another’s token as a native currency for paying transaction fees — in xDai’s case, that token is MakerDAO’s Dai. The architecture binds the economies of the two environments, but the sidechain is otherwise a completely independent entity with its own security rules.
In the Ethereum community, xDai is commonly known as a centralized layer two solution. It was launched by PoA Network, a project whose name directly hints to centralization — Proof of Authority is the somewhat euphemistic name of a consensus model where the validators are chosen by the project’s insiders, instead of a community.
The xDai chain has since its launch transitioned to a Proof-of-Stake model very similar to that used by EOS or Binance Smart Chain. The total number of validators can never exceed 19, compared to the tens of thousands of validators in Ethereum’s Beacon Chain. The benefit this architecture provides is faster scalability, with xDai offering an advertised 70 transactions per second for simple token transfers.
In a conversation with Cointelegraph, Friederike Ernst, chief operating officer at Gnosis, agreed that xDai is somewhat centralized:
“It is not as decentralized as mainnet, this goes without saying. Obviously these are for very different use cases: you don’t want to do things on xDai where you need the economic consensus guarantees of layer one. But for many things, you don’t actually need them.”
The allure of xDai comes in part from its almost plug-and-play compatibility with Ethereum. Its OmniBridge allows moving any token to xDai and back, while its blockchain architecture is almost identical to Ethereum. This makes porting DApps or infrastructure elements like oracles very easy.
The centralization concerns seem to be not enough to stop adoption. Chainlink sees itself following developer demand, with Johann Eid, head of integrations at Chainlink Labs, telling Cointelegraph that “smart contract developers should have the option to work with whichever chain is the best fit for their use case.”
For Omen, the decision to set up shop on xDai was a matter of immediate necessity, Ernst explained:
“For most things, the gas costs outweigh the downsides of being on a PoA chain. And the fact of the matter is, while people are betting on a lot of layer two solutions, very few of them are in production.
The growing adoption of xDai or Binance Smart Chain is seemingly at odds with the crypto community’s preference of decentralization. Ethereum fans often believe that the prevalence of DeFi on the blockchain is the result of its more decentralized architecture and community spirit. Indeed, the rise in usage of blockchains like Tron or BSC occurred after it became clear Ethereum could not cope with its load.
At the same time, decentralization appears to be not enough by itself. For example, the most Ethereum-like blockchain in existence is Ethereum Classic, which was formed by a community who believed that Ethereum was not decentralized enough. It has failed to attract almost any interest from DApp developers.
More centralized solutions have a major benefit going for them — they work, right now. Rollup-based layer two solutions are still in development, with Optimistic Rollups being closest to release. Ernst was not particularly enthusiastic about its one week withdrawal waiting period, though. “I’m a huge fan of zkRollups. There you don’t have the withdrawal limitations, but the technology is not developed enough.”
While some developers continue waiting for rollup-based solutions, platforms like xDai can advance unimpeded. “Ultimately, it’s a tradeoff between the higher security guarantees offered by Ethereum and the usability, innovation, speed and cost savings right now on L2 sidechains,” an xDai spokesperson told Cointelegraph. As long as gas fees on Ethereum remain high, DApps may bforced to choose practicality over ideology.
Chainlink Releases Native Substrate Module To Bring Its Oracles To Polkadot
Polkadot parachains can now choose to add Chainlink price feeds to their runtime.
Polkadot and Chainlink have announced the release of Chainlink’s Price Feeds as a module, or “pallet” in Polkadot terminology, for the Substrate blockchain framework.
The release means that any project building on the Substrate framework — which includes Polkadot and Kusama parachains, as well as independent blockchains — can integrate Chainlink oracles through a simplified library.
The announcement comes as the latest result of a long-standing collaboration between Chainlink and Polkadot, now offering a tangible product that can enable a number of DeFi-centric use cases on Polkadot.
The integration as a Substrate pallet means that it is up to each individual parachain to integrate and enable Chainlink oracles. This is a significant change from the architecture used on Ethereum, where Chainlink nodes regularly publish price data on each block, which smart contracts can then choose to reference or ignore.
On Polkadot, the more flexible design means that parachains that do not need Chainlink data won’t need to devote any blockchain space to it. On individual parachains, however, the end result may look similar to Ethereum. Peter Mauric, head of communications at Parity Technologies, compared the situation to “as if Chainlink were integrated as an opcode on Ethereum.”
The complete Chainlink integration is likely to be welcome news for DeFi-centric parachains like Moonbeam, Equilibrium or Acala, especially from the perspective of introducing Ethereum projects to Polkadot. However, there is likely to be additional development work required to adapt the Chainlink pallet for use with smart contracts.
Chainlink is used by a number of DeFi projects on Ethereum to read external market data — a critical necessity for lending protocols, in particular. The project recently began a shift toward focusing on more than just price data, a pivot that comes at the heels of introducing the Off-Chain Reporting architecture.