Chainlink, much like Tezos, has been one of the few altcoins to show signs of strength during what has been a long crypto winter. The cryptocurrency reached a new all time high of $4.89 just over a week ago.
Chainlink’s early days
Chainlink completed their ICO in the peak cycle of 2017. They raised a modest sum, comparatively to other projects, of $32 million. 30% of this went to the platform creators and team. Chainlink is built on top of Ethereum but claims to solve many of the issues that Ethereum has struggled with.
While Ethereum’s smart contracts occur on-chain, Chainlink’s platform aims to bridge this gap by providing the option to retrieve data off-chain. This occurs via the networks “oracles” which can retrieve data via API’s or Data Pools.
One of the biggest marketing storms cryptocurrencies can cause is by highlighting their newest partnerships. Ripple was the first cryptocurrency to announce partnerships left, right and centre. This allowed for Ripple fans to become excited, share the news and in many cases pump the price.
Chainlink has been no different in this regard. Rumours of a partnership with SWIFT, the international settlement system and possible links with Google created a huge swathe of excitement about the cryptocurrency.
SWIFT itself though has called cryptocurrencies “useless” highlighting their disdain for the nascent industry. Despite this, SWIFT has also investigated the possibilities of using the Hyperledger blockchain from IBM and investigated partnering with blockchain firm R3.
Another partnership for Chainlink was with internet giant Google. The idea behind the partnership is to place Google’s data warehouse and intelligence solution, BigQuery, upon an immutable blockchain.
Both announcements have been a considerable drivers in the popularity of Chainlink and a major reason for the cryptocurrencies consistent price rise.
Despite the positive news of partnerships, the Chainlink team has been accused of dumping on their users, much in the same way as Ripple. Approximately $600 million of “Link”, Chainlink’s token was sold during a 70-day period.
This is not unusual though. As mentioned, Ripple has been consistently selling their XRP tokens and the creator of Litecoin, Charlie Lee, sold all his Litecoin holdings at the peak of the last bull cycle.
The question though remains, what the Chainlink team does with these funds? Are they being reinvested back into the development of the cryptocurrency or are the team cashing in on their project?
It should be noted though that since the sell off from June, Chainlink has managed to reach new all-time highs in recent months suggesting the project has a strong foundation.
The effects of the partnership announcements should not be underestimated when considering Chainlink’s strong price performance. The hype creates a feedback loop and provides great marketing material for the cryptocurrency via social media.
While many cryptocurrencies have been seeing new lows, Chainlink, like Tezos, has bucked the trend. However, this success is no guarantee of long term survival in the brutal world of cryptocurrencies.