LINK is an Ethereum token that powers the Chainlink protocol and it is used to incentivize the proper operation of Chainlink’s Decentralized Oracle Networks (DONs).
Chainlink is an open-source protocol that went live on the Ethereum network in June 2019 and has since broadened to support additional layer 2 networks and blockchains.
These Decentralized Oracle Networks (DONs) provide decentralized services such as Proof of Reserve, Keepers, Verifiable Randomness, Price Feeds, and facilitate connectivity to any web API.
These DONs are focused on ensuring that the external information (event outcomes, weather data, pricing, etc.) and off-chain computations (transaction automation, randomness, fair ordering, etc.) that are fed to on-chain smart contracts are tamper-proof and dependable.
Simply put, the LINK token is used to pay for services on the Chainlink network, provide accurate data, incentivize nodes to do verifiable and honest work.
However, in order to become a node (which provides data to Chainlink oracles), holders are required to stake LINK tokens into a smart contract for it to act as an incentive against submitting false data or malfunctioning to the network.
Chainlink’s Oracle network is fully decentralized and it provides smart contracts to facilitate the sending of payments from the contract to payment networks and bank accounts, while simultaneously connecting smart contracts to the APIs and data sources that they need to function easily.
The LINK token has been bridged across various blockchains to allow traditional Chainlink oracle integrations.
Why is LINK token used within the Chainlink Network?
- Smart contracts are required to pay Chainlink nodes which entail using LINK tokens to obtain access to real-life data and other oracle services
- Present and future income of Chainlink nodes are designated in LINK tokens to incentivize the proper operation of the Chainlink Network
- Chainlink nodes are used to lock up LINK tokens in the future as collateral to back their oracle services
Interested in LINK? you can get it on DeFi Swap.
It is however important for you to note that the crypto market is a volatile place.
Therefore, crypto enthusiasts are advised to conduct extensive research on the various cryptocurrencies and tokens before purchase.
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