The cryptocurrency market’s massive gains especially in the first half of 2021 made it clear that the market can deliver impressive gains. However, finding opportunities for a 100X or even a 50X gain has become less probable from hype alone. Your best bet of making a substantial gain from the market is by investing your money in digital coins that have robust utility and whose platforms have a niche approach where they stand to benefit from robust demand. Few projects can fit that bill but ChainLink is one of them.
ChainLink leverages a problem-solving approach by providing the smart solutions required to facilitate and enable smart contracts to operate optimally. Smart contracts are essential especially in DeFi because they enable trustless transactions without intermediaries. However, they require external information or off-chain data to validate various conditions that are essential for the smart contract to execute as intended.
Oracles provide the link between smart contracts and off-chain data in a language that is optimal for the entire mechanism to work efficiently. ChainLink’s oracle services not only facilitate smart contract functionality but also expand the scope of smart contracts to facilitate real-world application. For example, they can be used to provide reliable market data or bank payments that can facilitate payment automation and other real-world operations that leverage the power of blockchain technology.
Investing in ChainLink
ChainLink’s oracle services will continue to enjoy strong demand from smart contracts, especially as Dapps become more popular over time. The demand for LINK, the native token on ChainLink will continue to go up because it is required to pay for the off-chain data. The demand potential for this service in smart contracts is immense, which also means the LINK token’s value might skyrocket in the future.
LINK is currently trading at $17.19 with a $7.5 billion market cap and a circulating supply of 438.5 million coins.
Link is down 5.02% in the last 24 hours and 12.33% in the last 7 days at the time of this press. However, it is still substantially higher than its January 2021 low of $10.90. On the other hand, it is heavily discounted compared to its 2021 high of $52.88 which it achieved in May at the height of the bull market before the bears took control.
LINK happens to be one of the coins in the market with a low circulating supply which means an increase in its market cap leads to a substantial price increase. For example, if an influx of more buyers ramped up the market cap to ChainLink’s market cap to $15 billion, Link’s price would jump to around $35 assuming the circulating supply remains constant.
Buying LINK at its currently discounted price seems like a good bargain, especially when you consider its untapped potential. Investors should, however, note that the coin has a maximum supply of 1 billion, which means that if coins might be released in the market it will dilute its price. The fact that it is a proof-of-stake network also means Chainlink provides opportunities for passive income that LINK holders can take advantage of.
If the project overview and price analysis are still not convincing enough, consider this. Chainlink has been selected to provide oracle data services to Arbol, an upcoming insurance startup built on Ethereum smart contracts. The startup will offer crop insurance to agricultural enterprises and farmers using data provided by the National Oceanic and Atmospheric Administration (NOAA). The startup will leverage Chainlink data and smart contracts for rapid deployment of payments, thus ensuring farmers are covered in case of bad weather that negatively affects their harvests. This is just one of the many real-world use cases that will fuel demand for Chainlink and the LINK token.