After announcing the staking plan and new programs, the BUILD and SCALE programs for Chainlink, the project's main token $LINK recorded a substantial increase (nearly 9%) in just one day. However, according to Holdstation, the growth of Chainlink will not stop at this level, at least in the near future.
Find out below about the potential of Chainlink and the $LINK token.
Read more: Chainlink Announces Staking And New Potential Plans - Analysis
An overview of Chainlink's performance so far
Since its launch, Chainlink has become an essential building block for DeFi. The price data provided from this project is still considered the most reliable to date, and more and more DeFi protocols rely on Chainlink's Oracle to provide the most accurate price data.
According to data from CryptoSlate, Chainlink is still the dominant Oracle platform compared to its competitors in particular and the Oracle data provider market in general, with a market capitalization 42 times that of the second-ranked project, API3, incomparable position. This will help the project hold a dominant role for at least the next many years.
The potential of the $LINK token
Staking and CCIP (Cross-Chain Interoperability Protocol)
Staking
Since its first launch, one of the main criticisms of the $LINK token has been that holders have not received any share of the revenue from the protocol. The launch of recent staking functionality will change this.
Recently the project officially announced the launch of Staking V0.1, early participants who stake $LINK will receive about 4-5% APR paid in tokens and depending on the number of nodes they have staked. These participants will be limited to 25 million $LINK as soon as they start participating. This number will likely increase to 75 million $LINK in the following months.
There will be a few changes when V1 is officially launched, then the stake reward will be based on the number of tokens that the user stakes and the fee that the user pays for the protocol. It will also remove the limit on the total amount of tokens staked as in the current beta test.
The exciting aspect of $LINK's staking mechanism is that nodes with more $LINK staked will receive more valuable work than nodes that receive less $LINK, which generally generates more revenue. more revenue for those running nodes at scale.
For example, if a node runner buys and stakes more $LINKs in his node, he or she will have the edge over the competition, resulting in more revenue while also using the rewards to continue. keep putting in stakes to get more profit, helping node runners can earn more passive income.
According to official information from the project during the SmartCon 2022 conference, $LINK staking will officially launch in December.
CCIP (Cross Chain Interaction Protocol) Function
This is another potential mechanism to help Chainlink grow. Cross-Chain Interoperability Protocol (CCIP), simply explained, is a system that allows developers to create multi-chain Smart Contracts.
CCIP will be the infrastructure that removes complexity from fragmented chains and makes blockchain truly interoperable. However, this project is still in the development stage, and has not set an official launch time.
Let's review the products that Chainlink is providing:
- Oracle: Allows the ecosystem to access and access data sources, legacy systems, and advanced operations.
- VRF (Verifiable Random Function): technology that helps to select the final results randomly for smart contracts.
- Chainlink Automation: Monitor the logic of automated processing outside the chain, then execute transactions inside the chain if the conditions are met.
- DECO: an Oracle protocol that helps ensure data security.
- CCIP: mentioned above.
These products can be seen as highlighting Chainlink's overall vision, to be the infrastructure for all blockchain technology.
Chainlink is not only developing for Blockchain and DeFi. The project is also aimed at traditional financial projects with ambitions to move to Blockchain. We can see these applications through weather data and seasonal insurance.
Project Revenue Potential
Last month, the total $LINK awarded to node runners was around 490,000 $LINK, which equates to a total of $44.5 million a year at the current price of $LINK at the end of the year. about 7.5 USD. This is an impressive number that helps attract more people to join running nodes, also showing the potential of the current ecosystem.
Summary
From the above statements, it can be seen that a bet on Chainlink is also a bet on Blockchain technology. These technologies have been implemented and applied as solutions for businesses, bringing outstanding development potential. The more protocols that use Chainlink, the more revenue for node runners will increase, which in turn will lead to an increase in demand for the $LINK token.
The above is the personal opinion of the writer, not investment advice.
