Chainlink (LINK) is one of the cryptocurrency that is heavily affected by the current bear market. Its price dropped by 70% within a year but in the last 2 weeks it showed some gains. But before diving into why this happened, let discuss few things about Chainlink.
What is Chainlink?
Chainlink is a blockchain that is used to build Decentralized Oracle Networks (DONs) bringing off-chain data to on-chain smart contracts. It first launched in 2017 by Sergey Nazarov and Steve Ellis on the Ethereum mainnet which then continued to support additional blockchains such as Polygon, Avalanche and BSC.
How Chainlink works is a bit complicated but to put it simply, Chainlink partners-up with data providers with off-chain information and convert that information to on-chain smart contracts with the help of node operators and smart contract developers.
Chainlink Token (LINK)
Chainlink has a native token called LINK. LINK is an ERC-677 token which is an extension of ERC-20 and used:
- to reward nodes for validating transactions,
- as an incentive to keep data accurate,
- to keep contracts stable and
- as a Proof-of-Reserve mechanism
LINK registered its all-time-high price of $52.70 it 2021 and its all-time-low price of $0.148 was registered in 2017.
LINK currently has a market cap of over 3.7 billion and ranked around 21st when compared with other tokens' market cap.
Why is There a Price Surge Currently?
In the last 2 week, the price of LINK jumped by over 23%. The current price of LINK is $7.65 (this price may change by the time you read this) but it was around $6.20 two weeks ago. This price increase was not without a reason.
The reason is that Chainlink is about to launch STAKING. Chainlink staking v0.1 will go live on the mainnet on December 6 and some members can get this early access. But starting December 8, everyone can get full access to the platform. Here is the full schedule:
Chainlink staking v0.1 will have an initial pool cap of 25 million LINK and v0.2, the second version of Chainlink staking is expected to launch within a year.
Final Thoughts
Chailink (LINK) price has been struggling for the past year and this new event is helping its price rise. Furthermore, when more LINK gets locked by staking, the liquid supply of the token decreases creating more reason for its price to boost. But one thing is certain in crypto, things change fast making it very hard to definitively predict where the price of a token will go.
So what are your thoughts?...... Let me know in the comment section.
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Disclaimer
I am not a financial advisor. The information found here are for educational purposes and cite my personal opinion.
