Chainlink or LINK is experiencing one of the fastest rises in the bitcoin market. LINK has grown so much over the last year that it is now among the top 5 crypto assets by market capitalization. As for today, LINK's market capitalization is $4,5 billion which places it just below XRP and Tether.
How did LINK manage to enter the top 5 crypto assets' list? We analyzed the available data to try and explain the phenomenal growth of LINK.
But first, what is Chainlink? Why is it causing so many ripples in the world of blockchain? Lrt’s find out below.
LINK is a decentralized financial token that bridges the gap between real-world transactions and smart contracts on the blockchain. LINK harnesses the power of smart contracts on the blockchain and uses it for everyday real-world transactions.
Smart contracts which run on Ethereum have a limitation as users can only use them within the blockchain. This limits the applications of smart contracts in the financial world as not everyone has moved operations to the blockchain.
A lot of modern financial transactions take place off the chain. These transactions take advantage of APIs from different service providers to complete transactions between businesses and customers.
LINK connects both worlds by acting as the middle-man. It uses an oracle software which translates off the chain data and transactions into blockchain smart contracts. By combining both worlds, LINK utilizes blockchain's immutability and integrates it into everyday digital activities giving more people access to decentralized finance services.
So, what makes LINK special? Why has it risen so fast in the world of cryptocurrencies?
The growth of LINK corresponds with the meteoric rise of decentralized finance or DeFi. This is why other DeFi tokens apart from LINK have grown as well. Maker (MKR), Aave (LEND), Synthetix Network Token (SNX), and Dai (DAI) have all been on an upward trend in the last year. Decentralized Finance is the new frontier in the world of finances combining both cryptocurrencies and modern financial transactions.
DeFi makes it possible for people to access automated loans, save money, make investments, and handle all their insurance needs without the need for a central controlling body. All these transactions take place on the blockchain.
As one of the earliest DeFi tokens, it is not surprising that LINK has the largest market capitalization of all the DeFi tokens. LINK currently retails at $12 which is a more than 400% increase in its price since January 2020.
So, what exactly makes LINK so popular?
Key to LINK's recent meteoric rise has been its partnership with major companies in the financial world. The growth, both in the price and market capitalization of LINK has been directly proportional to the deals which Chainlink has struck with several companies.
As of August 2020, LINK was in partnership with more than 70 companies in different industries. LINK made all these partnerships public through announcements on their social media pages and press releases.
All these partnerships triggered lots of engagements from followers and most importantly they helped the price of LINK to grow. After every partnership announcement, there was an average price rise of more than 10%. The biggest surge in price came when LINK partnered with Google Cloud back in 2019. Within 48 hours of the announcement, LINK's price grew by more than 50%.
The other major corporations which the company partners with include Oracle, Dapps Inc, Binance, Reserve, and Matic Network. All these partnerships with trusted companies make LINK legitimate and have helped them with the marketing as well. It is not surprising, therefore, that Chainlink soared to the top 5 list of cryptos.
The quick, seamless onboarding process of Chainlink is part of the reason why the company is so popular. Since LINK targets businesses with no prior experience in the blockchain, they've made their onboarding process as simple as possible.
Whether or not you have prior experience working with smart contracts, you will find it very easy to use LINK in your daily operations. LINK has clear and concise documentation on their website which helps beginners to get the hang of what their product is all about.
Their customer service team is also always on hand to help new users to integrate LINK into their business. Their model of business is very effective and promises to keep it growing even further.
Chainlink boasts of security, a robust network, and an innovative product that promises to revolutionize the world of finance. Chainlink delivers what it promises and this has helped the
Company to get a foothold in the crypto world.
Their robust node network ensures that their services are reliable at all times. This is a very essential element of any business handling large, sensitive data and LINK excels quite well at it.
Clever marketing and promotion of DeFi have worked to LINK's advantage. LINK has benefitted from the growing belief that DeFi is the future of finance.
Since LINK positioned itself as one of the most reliable DeFi tokens, most people who are looking to invest in DeFi automatically choose to start their journey with the coin. This has helped the coin's market cap and helped it grow to one of the world's leading crypto assets.
LINK's growth is not an accident. The company has brought a large paradigm shift in the world of traditional finance and promises to change a lot of industries. It is not surprising, therefore, that the coin managed to rise to be among the world's top cryptocurrency assets.