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Chainlink Ecosystem Overview

Yo-An Lin
November 23, 2021

Chainlink Ecosystem Overview

Yo-An Lin

November 23, 2021

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  1. ChainLink History • Chainlink was created in 2014, though it

    didn’t launch until 2017. Its founder is Sergey Nazarov, a 32-year-old entrepreneur who has a major presence in the crypto market. • Originally, the Chainlink network was designed to be a centralized oracle system that can verify incoming information. However, it has since morphed into what it is today: a decentralized oracle network that pairs with smart contracts to provide secure transactions using external data sources and APIs.
  2. ChainLink Price History • When Chainlink’s LINK tokens fi rst

    hit the market in 2017, they traded for just above a cent in USD. The cryptocurrency’s market capitalization was also understandably quite low. • Prices stayed this way for a while, trading at less than a dollar per token until mid-2019, when the price per token increased, and it began trading at between $1 and $4 per token. However, for the latter half of 2020, LINK tokens began to increase in price even more to over $14. In February 2021, LINK reached an all-time high price of nearly $37 per token.
  3. The Ecosystem Roles • Data Clients (mainly DeFi applications) •

    Smart Contract Developers • ChainLink Node Operator (CL Node)
  4. The LINK token • ERC-677 (proposed by ChainLink developers) •

    The ERC-677 issue is not closed yet. Hence it’s not a approved standard. • ERC-20 compatible token • transferAndCall method (let you transfer a token and call a method on contract)
  5. Chainlink Node Requirement • An oracle contract (one-to-one relationship to

    the node) • PostgreSQL (for storing jobs, runs and wallet keys) • Low hardware requirement: 2GB~4GB memory is enough. • Blockchain node endpoint (for Ethereum, you can use geth, infura.io or chainstack) • Wallet key for the node. (For writing transactions to the blockchain) • Gas tokens in the wallet (for Ethereum, it’s ETH)
  6. Oracle Contract Chainlink Node Chainlink Node Wallet Aggregator Contract Monitoring

    and Sign transaction transferAndCall Blockchain one-to-one relationship
  7. Chainlink Node Components • An Oracle contract • Jobs (Oracle

    contracts use JobID to call the API on the node) • Runs • Bridges • Core Adaptor • External Adaptor (an adaptor connecting to external web service via JSON api)
  8. Chainlink Node Jobs • Each Chainlink Node has its own

    unique job entry (unique job ID). • JobID is an UUID. • Oracle contracts use the JobID to execute the API de fi ned on the node. • Jobs de fi ne the task sequence.
  9. Chainlink Node External Adaptor • External Adaptors are just web

    services with the required JSON request/ response speci fi cation. • You register the external adaptor via the Chainlink Node bridge, so that Jobs can get the data from the external adaptor. • An external adaptor can be a service written in any programming language.
  10. Price Feeds • Major Price Feeds are maintained by Chainlink

    O ffi cial. (They also pay the gas fee and LINK token to the oracle contracts) • Price feed contracts are not open sourced. They are hidden behind the proxy contract. • Some companies did the reverse engineering to implement their own price feed. • To join the major price feed oracle network, you need to join the Oracle olympics. • To add a new token to the o ffi cial price feed, $3M market cap is the minimal requirement.
  11. Aggregator • Aggregator calls the oracle network. • There are

    2 kinds of aggregator: • Flux Aggregator - no o ffi cial documents, only client tutorial. Contract- based, high cost. • O ff -chain Reporting (OCR), no o ffi cial documents as well. O ff -chain computing with a consensus algorithm.
  12. Wrap up • You receive LINK token from your oracle

    contract. • You burn ETH token as the gas token to send the result as a txn. • One oracle contract can only have one CL node running. • You don’t need LINK token to run a CL node. • Chainlink node are isolated, you can not join the price feed by yourself. • Price feed smart contracts are closed source. (Club member only) • No o ff -chain reporting and fl ux aggregator documentation. (Club member only)