LINK is an Ethereum-based token that is used to pay Chainlink node operators.
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What Is LINK (Chainlink)?
LINK (Chainlink) is the utility token of Chainlink that serves as a bridge between smart contracts and off-chain entities such as APIs, conventional banking, data feeds, etc. LINK is used to pay node operators that retrieve data from off-chain resources – and for other services too. This way, Chainlink allows smart contract creators to communicate with outside data sources, making it possible to develop smart contracts that are connected to real-world events.
Chainlink is a decentralized oracle network that connects smart contracts on its platform to data from the real world. Blockchains can’t access the outside data, so oracles take up the role of data feeds. Oracles provide external data and trigger smart contract executions upon meeting certain pre-defined situations. Chainlink has opened up several possibilities for smart contract applications as it allows them to access data from outside their networks. This results in enabling them to make automated agreements more intelligent.
Chainlink was developed by Sergey Nazarov and Steve Ellis. It is well-known for being the first oracle service on the market and has established partnerships with companies such as Google Cloud, Oracle, SWIFT, and Intel.
LINK is an ERC-677 token, which inherits functionality from the ERC20 token standard. This is why many would call it an ERC-20 token as well. The ERC-677 token standard defines a two-way bridge that allows interoperability between different blockchains. The two-way bridge is based on the ERC-20 token standard, where users can transfer tokens from one blockchain to another by sending them to a contract address on the second blockchain.
ERC-677 supports all of the basic functionality of ERC-20, plus the ability to specify a recipient when transferring tokens. This means that transfers and approvals can be directed to contracts, allowing tokens to be used directly in other contracts.
For example, a smart contract can automatically payout if an external event takes place like a weather event, sports game result, or fluctuation in currency value.
LINK is an ERC20 utility token that serves as a payment mechanism for Chainlink nodes to provide data to smart contracts (oracles are paid with LINK). The more data requests that are serviced by a node, the more LINK they earn.
LINK has a fixed supply of 1 billion tokens. Since only 350 million were sold during its initial coin offering (ICO) in 2017, there is a 650 million remaining supply of LINK tokens. 30% were allocated to LINK’s founding team while the remaining 35% are used in its token reward system.