ChainLink is a decentralized oracle network that provides real-world data to smart contracts on the blockchain. LINK is a digital asset token used to pay for services on the network. This is the same as Tadpole Finance which uses TAD tokens and other DeFi protocols that use their respective tokens.
The protocol in the ERC20 network was built as a solution on the basis of 3 problems, namely connectivity, scalability and privacy. Because Chainklink is a bridge to blockchain, it doesn’t benefit from the mining process. It benefits from all the blockchains that use it.
Chainlink is a middleware application, similar to the Google Apps Store. As we know, Google Apps Store provides services by selling applications in it. The profit obtained is in the form of money from selling the applications in it.
This protocol will connect the smart contract in the form of data to the off-chain input. The data will output off chain in the form of payment or data transfer or ownership transfer. The incoming off-chain input data indicates that the conditions made during the contract creation have been met and can be processed to the next stage.
However, unlike the Appstore, Chainlink uses LINK tokens for all of its payments.
The user trust feature is the most important feature in this protocol. API is a centralized system that is most widely used today. The media or the link between the off-chain (API) and on-chain networks is a security critical point that must be watched out for. To anticipate this and ensure the chainlink network remains secure, the developer uses several features such as Oracle distribution and aggregation.
Off-Chain Security System
This protocol is also complemented by an off-chain security system. This system begins by looking at existing smart contracts in the on-chain environment and then moving them off-chain into a secure and trusted private environment. Data integrity will be fully guaranteed from other parties. This protocol uses trusted hardware such as Intel SGX.
In this way, the workload of the smart contract platform is drastically reduced and allows the network to focus on other things. All of these things make chainlink even more popular. Its presence is not only capable of solving problems facing decentralized blockchain technology, but also has the potential to revolutionize the world of smart contracts as a whole.