Chainlink is a decentralised network that takes data from off-chain sources (outside of a blockchain) and brings them on-chain (onto a blockchain).
Chainlink uses oracles to fetch data from outside sources. Oracles play a crucial role in delivering real-world information to a wide range of decentralised applications (dApps) such as AAVE, Synthetix and Trader Joe.
Decentralised networks such as Avalanche (AVAX), Ethereum and Solana make use of Chainlink's unique abilities.
What is Chainlink (LINK)?
Let's start with smart contracts. A smart contract is a predetermined agreement on a blockchain that executes commands on a network only when a certain set of conditions are met. dApps like Shibaswap and Pancakeswap are smart contracts with user interfaces.
These smart contracts may sometimes require additional off-chain data to execute commands online and display fresh statistics to meet distinctive smart contract conditions.
This is where Chainlink comes into play—a decentralised blockchain oracle network that allows smart contracts to communicate securely with off-chain data repositories.
Oracles are linked to Chainlink's decentralised network of nodes. Chainlink node operators help oracles collect off-chain data.
Chainlink plays a crucial role in acting as an intermediary between blockchains and the outside world, helping to enhance the capabilities of dApps that investors enjoy using.
What Is LINK used For?
Chainlink's native token LINK was launched in 2017. Since its introduction to the cryptocurrency market, LINK has gained a strong community following.
The LINK token itself serves as an in-house currency to pay Chainlink node operators for maintaining oracles and retrieving necessary external data for the network.
Learn about other cryptocurrencies such as Quant (QNT), Luna Classic and Shiba Inu.
For more articles like this, take a look at our Planet Crypto page.