Chainlink (blockchain)

Last updated
Chainlink
Chainlink Logo Blue.svg
Denominations
PluralChainlink
CodeLINK
Development
Original author(s)Sergey Nazarov, Steve Ellis, Dr. Ari Juels [1] [2]
White paper chain.link/whitepaper
Code repository github.com/smartcontractkit/chainlink
Written in Solidity, Go
Operating system Blockchain-agnostic
Source modelOpen source
License MIT License
Ledger
Supply limit1,000,000,000
Website
Website chainlinklabs.com

Chainlink is a decentralized blockchain oracle network built on Ethereum. [3] [4] The network is intended to be used to facilitate the transfer of tamper-proof data from off-chain sources to on-chain smart contracts. Its creators claim it can be used to verify whether the parameters of a smart contract are met in a manner independent from any of the contract's stakeholders by connecting the contract directly to real-world data, events, payments, and other inputs. [5]

Contents

History

Chainlink was created in 2017 by Sergey Nazarov and Steve Ellis, [6] who co-authored a white paper introducing the Chainlink protocol and network with Cornell University professor Ari Juels the same year. [1] Chainlink acts as a "bridge" between a blockchain and off-chain environments. [7] The network, which services smart contracts, was formally launched in 2019. [6]

In 2018, Chainlink integrated Town Crier, a trusted execution environment-based blockchain oracle that Juels also worked on. Town Crier connects the Ethereum blockchain with web sources that use HTTPS. [8]

Chainlink's trademark was registered in the Cayman Islands on March 12, 2019, the corporation created being Smartcontract Chainlink Sezc, Ltd. [ citation needed ]

In 2020, Chainlink integrated DECO, a Cornell project co-created by Juels. DECO is described by its authors as a protocol that uses zero-knowledge proofs to allow users to prove information is true to a blockchain oracle without revealing sensitive information, such as birth dates. [9] Chainlink published a second white paper in April 2021. That paper, Chainlink 2.0: Next Steps in the Evolution of Decentralized Oracle Networks, detailed a vision for expanding the role and capabilities of decentralized oracle networks to include hybrid smart contracts, which utilize on-chain code and off-chain services provided by oracle networks. [10]

Technology

A visual representation of Chainlink's "smart bond architecture" SIBOS17 - Chainlink - cleaned.png
A visual representation of Chainlink's "smart bond architecture"

Chainlink's decentralized oracle network is an open-source technology infrastructure that allows any blockchain to securely connect to off-chain data and computation resources. The network nodes fetch, validate, and deliver data from multiple sources onto blockchains to execute smart contracts. [11]

In addition to the transfer of external information to a blockchain, Chainlink can also be used for several different off-chain computation functions, including a verifiable random function (VRF) and data feeds. The data feeds have been used to bring election data on-chain. [12]

Chainlink's VRF can be used for random number generation which can be used in decentralized gaming. ZDNet reported the verifiability of the random number generation ensures the in-game results are tamper-proof. [13]

Node operators are compensated with the network's native cryptocurrency, LINK. [11] Chainlink's LINK token is an ERC677 token, an extension of ERC-20. All LINK tokens have been premined and largely withheld by the central issuer. A fraction of the pre-mined token supply was offered for sale to retail buyers in a controversial and legally murky initial coin offering (ICO). Tokens act as data payloads, feeding the required data from off-chain sources to smart contracts, which then act accordingly in response to the data provided by the token. [14] According to Chainlink, the trade value derived from these tokens is used to pay node operators for retrieving data from smart contracts, and also for deposits placed by node operators as required by contract creators. Tokens can be stored in any ERC-20 wallet, as the ERC677 token retains all the functionality of an ERC-20 token. [15] [16]

Related Research Articles

A smart contract is a computer program or a transaction protocol that is intended to automatically execute, control or document events and actions according to the terms of a contract or an agreement. The objectives of smart contracts are the reduction of need for trusted intermediators, arbitration costs, and fraud losses, as well as the reduction of malicious and accidental exceptions. Smart contracts are commonly associated with cryptocurrencies, and the smart contracts introduced by Ethereum are generally considered a fundamental building block for decentralized finance (DeFi) and NFT applications.

<span class="mw-page-title-main">Ethereum</span> Open-source blockchain computing platform

Ethereum is a decentralized blockchain with smart contract functionality. Ether is the native cryptocurrency of the platform. Among cryptocurrencies, ether is second only to bitcoin in market capitalization. It is open-source software.

A decentralized autonomous organization (DAO), sometimes called a decentralized autonomous corporation (DAC), is an organization managed in whole or in part by decentralized computer program, with voting and finances handled through a blockchain. In general terms, DAOs are member-owned communities without centralized leadership. The precise legal status of this type of business organization is unclear.

A blockchain is a distributed ledger with growing lists of records (blocks) that are securely linked together via cryptographic hashes. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. Since each block contains information about the previous block, they effectively form a chain, with each additional block linking to the ones before it. Consequently, blockchain transactions are irreversible in that, once they are recorded, the data in any given block cannot be altered retroactively without altering all subsequent blocks.

Hyperledger is an umbrella project of open source blockchains and related tools that the Linux Foundation started in December 2015. IBM, Intel, and SAP Ariba have contributed to support the collaborative development of blockchain-based distributed ledgers. It was renamed the Hyperledger Foundation in October 2021.

A decentralised application is an application that can operate autonomously, typically through the use of smart contracts, that run on a decentralized computing, blockchain or other distributed ledger system. Like traditional applications, DApps provide some function or utility to its users. However, unlike traditional applications, DApps operate without human intervention and are not owned by any one entity, rather DApps distribute tokens that represent ownership. These tokens are distributed according to a programmed algorithm to the users of the system, diluting ownership and control of the DApp. Without any one entity controlling the system, the application is therefore decentralised.

<span class="mw-page-title-main">Ethereum Classic</span> Blockchain computing platform

Ethereum Classic is a blockchain-based distributed computing platform that offers smart contract (scripting) functionality. It is open source and supports a modified version of Nakamoto consensus via transaction-based state transitions executed on a public Ethereum Virtual Machine (EVM).

<span class="mw-page-title-main">Cardano (blockchain platform)</span> Public blockchain platform

Cardano is a public blockchain platform. It is open-source and decentralized, with consensus achieved using proof of stake. It can facilitate peer-to-peer transactions with its internal cryptocurrency, ADA.

<span class="mw-page-title-main">Bitcoin scalability problem</span> Scaling problem in bitcoin processing

The Bitcoin scalability problem refers to the limited capability of the Bitcoin network to handle large amounts of transaction data on its platform in a short span of time. It is related to the fact that records in the Bitcoin blockchain are limited in size and frequency.

<span class="mw-page-title-main">IOTA (technology)</span> Open-source distributed ledger and cryptocurrency

IOTA is an open-source distributed ledger and cryptocurrency designed for the Internet of things (IoT). It uses a directed acyclic graph to store transactions on its ledger, motivated by a potentially higher scalability over blockchain based distributed ledgers. IOTA does not use miners to validate transactions, instead, nodes that issue a new transaction on the network must approve two previous transactions. Transactions can therefore be issued without fees, facilitating microtransactions. The network currently achieves consensus through a coordinator node, operated by the IOTA Foundation. As the coordinator is a single point of failure, the network is currently centralized.

<span class="mw-page-title-main">Tron (cryptocurrency)</span> Blockchain computing platform

TRON is a decentralized, blockchain-based operating system with smart contract functionality, proof-of-stake principles as its consensus algorithm and a cryptocurrency native to the system, known as Tronix (TRX). It was established in March 2014 by Justin Sun and since 2017 has been overseen and supervised by the TRON Foundation, a non-profit organization in Singapore, established in the same year. It is open-source software.

Decentralized finance offers financial instruments without relying on intermediaries such as brokerages, exchanges, or banks by using smart contracts on a blockchain, mainly Ethereum. DeFi platforms allow people to lend or borrow funds from others, speculate on price movements on assets using derivatives, trade cryptocurrencies, insure against risks, and earn interest in savings-like accounts. DeFi uses a layered architecture and highly composable building blocks. Some applications promote high-interest rates but are subject to high risk. Coding errors and hacks have been common in DeFi.

<span class="mw-page-title-main">MetaMask</span> Software cryptocurrency wallet

MetaMask is a software cryptocurrency wallet used to interact with the Ethereum blockchain. It allows users to access their Ethereum wallet through a browser extension or mobile app, which can then be used to interact with decentralized applications. MetaMask is developed by ConsenSys Software Inc., a blockchain software company focusing on Ethereum-based tools and infrastructure.

<span class="mw-page-title-main">Uniswap</span> Decentralized cryptocurrency exchange

Uniswap is a decentralized cryptocurrency exchange that uses a set of smart contracts to execute trades. It is an open source project and falls into the category of a DeFi product because it uses smart contracts to facilitate trades. The protocol facilitates automated transactions between cryptocurrency tokens on the Ethereum blockchain through the use of smart contracts. As of October 2020, Uniswap was estimated to be the largest decentralized exchange and the fourth-largest cryptocurrency exchange overall by daily trading volume.

A blockchain oracle is a third-party service that connects smart contracts with the outside world, primarily to feed information in from the world, but also the reverse. Information from the world encapsulates multiple sources, so that decentralized knowledge is obtained. Oracles provide a way for the decentralized Web3 ecosystem to access existing data sources, legacy systems, and advanced computations. Decentralized oracle networks (DONs) enable the creation of hybrid smart contracts, where on-chain code and off-chain infrastructure are combined to support advanced decentralized applications (dApps) that react to real-world events and interoperate with traditional systems.

In blockchain technology, a testnet is an instance of a blockchain powered by the same or a newer version of the underlying software, to be used for testing and experimentation without risk to real funds or the main chain. Testnet coins are separate and distinct from the official (mainnet) coins, don't have value, and can be obtained freely from faucets.

Algorand is a cryptocurrency protocol providing pure proof-of-stake on a blockchain. Algorand's native cryptocurrency is called ALGO.

<span class="mw-page-title-main">0x (decentralized exchange infrastructure)</span> Cryptocurrency

0x is an open-source, decentralized exchange infrastructure that enables the exchange of tokenized assets on multiple blockchains. Developers can use 0x to incorporate exchange functionality into their applications, and market makers can use 0x to create markets for cryptocurrencies and tokens. ZRX, an Ethereum ERC-20 token, is the native governance and staking token of 0x. Individuals who own ZRX can vote on protocol changes and stake their tokens to earn liquidity rewards in Ether (ETH). The project's creator and core developer is 0x Labs.

<span class="mw-page-title-main">ERC-721</span> A technical standard for NFTs

The ERC-721 Non-fungible Token Standard, is a technical framework, defining a set of rules and interfaces for creating and managing unique, non-fungible tokens (NFTs) on the Ethereum blockchain. ERC-721 is recognized for formalizing the concept of an NFT and establishing the foundation of the multi-billion dollar digital collectibles eco-system that emerged alongside its adoption. It is one of the most widely used NFT standards across use cases and has been utilized in various high profile projects.

William "Will" Entriken, also known by the online moniker Fulldecent, is a solutions architect, cybersecurity specialist, financial analyst, general manager, and civic hacker best known for his contributions in blockchain technology and open sourced solutions. He is recognized as the lead author of the landmark Ethereum paper ERC-721: Non-Fungible Token Standard, published in 2018. This paper is recognized for pioneering the foundation of the digital collectibles eco-system by establishing a programming standard called "ERC-721" to create NFTs via smart contracts on Ethereum. It also first formalized and defined the term Non-Fungible Token (NFT) into blockchain nomenclature which was made popular by the blockchain game CryptoKitties; the CTO of that game, Dieter Shirley, is also a fellow co-author of the published paper.

References

  1. 1 2 Ellis, Steven; Juels, Ari; Nazarov, Sergey (4 September 2017). "ChainLink A Decentralized Oracle Network". chain.link. Archived from the original (paper) on 6 October 2017. Retrieved 8 October 2022.
  2. ↑ Caldarelli, Giulio (November 2020). "Understanding the Blockchain Oracle Problem: A Call for Action". Information . 11 (11). Verona, Italy: MDPI: 509. doi: 10.3390/info11110509 .
  3. ↑ Breidenbach, Lorenz; Chacin, Christian; Chan, Benedict; Coventry, Alex; Ellis, Steven; Juels, Ari; Koushanfar, Farinaz; Miller, Andrew; Magauran, Brendan; Moroz, Daniel; Nazarov, Sergey; Topliceanu, Alexandru; Tramèr, Florian; Zhang, Fan (15 April 2021) [2017]. "Chainlink 2.0. The Next Steps in the Evolution of Decentralized Oracle Networks 9 Economics and Cryptoeconomics Staking" (paper). chain.link. University of Bern, Cornell Tech, University of California, University of Illinois Urbana-Champaign, Duke University. research.chain.link. pp. 2, 78. Archived (PDF) from the original on 2021-04-15. Retrieved 4 July 2021.
  4. ↑ Anadiotis, George. "Chainlink launches Mainnet to get data in and out of Ethereum smart contracts". ZDNet. Retrieved 2021-08-29.
  5. ↑ Nikbakht, Ehsan; Baker, H Kent; Smith, Sean Stein (9 March 2021). The Emerald Handbook of Blockchain for Business. Emerald Publishing Limited. ISBN   9781839821981 . Retrieved 8 March 2022.
  6. 1 2 Anadiotis, George (May 30, 2019). "Chainlink launches Mainnet to get data in and out of Ethereum smart contracts". ZDNet . Retrieved August 3, 2021.
  7. ↑ Arrowsmith, Ranica (December 1, 2020). "Tech, accelerated; 2020 was a hothouse for technology, speeding up the already rapid pace of development and adoption". Accounting Today . No. 34. p. 30.
  8. ↑ Orcutt, Mike (November 19, 2018). "Blockchain smart contracts are finally good for something in the real world". MIT Technology Review . Retrieved August 3, 2021.
  9. ↑ Brett, Charles (September 4, 2020). "Chainlink acquires DECO from Cornell". Enterprise Times. Retrieved August 3, 2021.
  10. ↑ Anadiotis, George (April 15, 2021). "Chainlink 2.0 brings off-chain compute to blockchain oracles, promotes adoption of hybrid smart contracts". ZDNet. Retrieved July 27, 2021.
  11. 1 2 Anadiotis, George (May 30, 2019). "Chainlink launches Mainnet to get data in and out of Ethereum smart contracts". ZDNet. Retrieved July 27, 2021.
  12. ↑ Castillo, Michael del (November 3, 2020). "How To Track Official Election Results On Ethereum And EOS". Forbes. Retrieved July 26, 2021.
  13. ↑ Brown, Eileen (November 10, 2020). "Chainlink VRF makes blockchain games more trustworthy by using verifiable on-chain source of randomness". ZDNet. Retrieved August 3, 2021.
  14. ↑ Prathap, Madana. "Looking beyond Bitcoin and Ethereum — Here's a list of top 15 altcoins you should keep an eye on". Business Insider India.
  15. ↑ "FAQ | Chainlink Documentation". docs.chain.link. Retrieved 2021-07-24.
  16. ↑ Financial Cryptography and Data Security. FC 2021 International Workshops. Springer Berlin Heidelberg. 16 September 2021. ISBN   9783662639580.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.