What Does Chainlink Do?

Chainlink (LINK) is an oracle, a third-party service that puts off-chain data, such as finance and weather data, onto a blockchain for consumption by other apps. An oracle queries, verifies, and authenticates external data sources, making them ready for use in smart contracts (on-chain).

Real-world use cases of oracles include: Augur (REP), a marketplace for betting on real-world events, such as election results. Augur relies on an oracle as a permanent reference for real-world event results. Aave, Celsius, Compound, and many other decentralized finance (DeFi) firms use Chainlink Price Feed oracles to get off-chain finance data.

Many oracle providers also offer VRF (Verifiable Random Function) services, where they generate a random number generator used for minting NFTs. Axie Infinity uses Chainlink VRF for minting characters with random attributes.

Market Overview:

Dominant Leader

Chainlink (LINK) ($16 billion market cap) - Chainlink is the decentralized oracle with the highest market cap. Chainlink is well-established and has hundreds of customers.

Specialized Projects

WINkLink (WIN) ($520 million market cap) - WINkLink offers finance data and random number generator oracle services for the Tron ecosystem.

iExec RLC (RLC) ($419 million market cap) - iExec is a marketplace for cloud resources intended for blockchain projects. Blockchain developers pay to rent compute power on providers' computers.

API3 (API3) ($78 million market cap) - AIP3 provides decentralized data feeds for dApps to consume and offers a service that connects data from any web API to the blockchain.