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.