Chainlink – an oracle blockchain service provider – now has over $60 billion deposited in smart contracts. A recent analysis by Bank of America claims that the network will drive blockchain adoption in gaming, gambling, and insurance industries, among others.
Chainlink Driving Defi Growth
According to a research report released on Wednesday, the firm believes Chainlink is currently a likely driver behind growing total value locked in decentralized finance (DeFi). According to DeFiLlama, there is now over $205 billion locked in DeFi – up over 300% year over year.
Defi refers to the provision of financial services such as insurance, borrowing, and lending through blockchain-based smart contract systems, rather than through traditional centralized systems like banks. Ethereum – on which Chainlink is built – is currently Defi’s main blockchain, holding $121 billion TVL.
Chainlink is what’s known as a blockchain “oracle” – a device that connects on-chain and off-chain data. These allow smart contracts to execute based on inputs from the real world, rather than just blockchain-native variables. Its growth was exponential last year, scaling up from just $7 billion in TVL at the end of 2020.
The report attributes the “ability of hybrid smart contracts, or self-executing, tamper-proof digital agreements, to verifiably and securely access real-world data via oracle nodes such as market prices, time of day , weather and GPS location”, for Defi. recent growth.
The analysts also state that oracles “enable the next generation of blockchain use cases,” and could “disrupt major industries.”
The Rise of Chainlink
Major companies, including the Associated Press and AccuWeather, are now using Chainlink, monetizing their data by providing it to smart contract developers. More than 1100 projects are live on the network.
The blockchain’s native token LINK is now the 22nd most valuable cryptocurrency market cap, totaling over $7.5 billion. In September, the network partnered with Cardano to integrate oracle data into the latter’s smart contracts.
Bank Of America’s bullishness on crypto
Despite the conflict banks and crypto are often assumed to have, Bank of America has been remarkably bullish on the space. In an October report, the institution noted that the crypto was now “too big to ignore.” This was a dramatic shift in attitude from his previous stance in March 2021, where he deemed Bitcoin “too volatile” and impractical as a store of value.
However, the institution appears more interested in the broader crypto ecosystem, and blockchain technology as a whole. “Bitcoin is important, but the digital asset ecosystem is so much more,” reads its October statement.
