Chainlink is a decentralized oracle network (DONs) that runs a tunnel to feed real work data into smart contracts. It is one of the most technologically advanced blockchain projects and has increasingly become a more significant part of Decentralized Finance through improving smart contracts to become more dynamic.

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What is Chainlink

Created in 2017, Chainlink is a decentralized oracle network (DONs) that provides real-world off-chain data and submits it into smart contracts to improve its functionality. It is a data blockchain to the blockchain. It makes smart contracts smarter. It makes digital agreements dynamic by feeding live data so that smart contracts can continue adopting the real-world data and becomes more relevant to execute.

Why Choose Chainlink

Chainlink is one of the first blockchain applications to integrate off-chain real-world data into smart contracts. Furthermore, it makes smart contract automation feasible. A smart contract is programmed to be a conditional program with sufficient specific conditions to execute.

Goals of Chainlink

Chainlink provides a way to improve smart contracts by feeding off-chain data to improve the smart contracts. It creates a path to communicate with smart contracts to improve the execution. It makes smart contracts more connected to the real world. It becomes a bridge between the internet of things, big data, and blockchain. It becomes a validator of billions of dollars in transaction value worth of data and is facilitated into the blockchain.

Chainlink Focus on Data

Chainlink automates the transfer of data between blockchains and off-chain systems. Their data focus is similar to Google as a provider to the blockchain system. They focus on data quality and enable smart contracts to remove any centralized point of failure. The Oracle networks are collaborative networks run by multiple nodes to reduce the chance of a single failure. They provide high-quality data to improve smart contracts.

Holders From Chainlink

Holders are not equally distributed among different users. However, since Chainlink is heavily technological dependable, node operators have the largest stack of tokens. The second-largest holders are Chainlink developers. As a result, they heavily controlled the tokens. Both node operators and developers held over 50% of the token supply, making Chainlink a centralized influence by their operators and developers.

Risks With Chainlink

Even though Chainlink tries to resolve a single point of failure on the smart contracts, their token supply is largely controlled by node operators and developers which may create a single point of failure on the operational aspect. In addition, there is no third-party security audit from their codes. Although developers are increasingly active in their code development, you aren’t likely to know how code performs and how secure their blockchain is.

In Conclusion

I think Chainlink makes a bridge between off-chain data to blockchain smart contracts. It creates possible ways to improve smart contracts and makes them more dynamic. However, the way Chainlink operates will create a single point of failure in supplying quality data that defeats the purpose of the blockchain.