Chainlink Use Cases, Differentiators, and Competitors
Chainlink is a type of Oracle Network which is based on Decentralization which aids in transferring real-world data to Smart Contracts on the Block Chain. With it, businesses can access any major blockchain network, including Ethereum and Solana, while securely enabling computations on and off-chain.
A Quick Word on Smart Contracts
- Simply put, smart contracts are blockchain-based algorithms that execute when certain criteria are met. They are often used to automate the implementation of an agreement so that all parties can be certain of the conclusion right away, without the need for an intermediary or additional delay. They can also automate a workflow such that when circumstances are met, the following action is executed.
Uses and Use case of Chainlink
Aggregate price feeds for digital and traditional currencies are part of the most advanced capability. Chainlink is luring outside data suppliers, like centralized and decentralized exchanges, to develop price feeds. The information from external providers is then combined by Chainlink nodes to produce a price update that is impervious to manipulation. Finally, any smart contract with established access can use this price data. In this way, Chainlink can provide services to data consumers like DeFi firms as well as data providers who can sell their data and who can use the data for smart contracts. For instance, Synthetix uses loan and borrowing platform to guarantee the total value of the collateral and Chainlink to set pricing on their derivatives platform.
Use cases of Chainlink
Aave is a non-custodial, open-source, decentralized money market system. Borrowers can access these lending pools to acquire loans, while depositors can earn income by supplying liquidity to the pools.
Synthetix is based on Chainlink Ecosystem and provides exposure to real-world assets on the blockchain and special derivatives.
What Makes Chainlink Different from Others?
In many aspects, Chainlink is different from its rivals. It, for instance, is a decentralized oracle network. Oracles are off-chain sensors that are essential today. Data can be transferred to and from the blockchain using oracles.
It operates on multiple blockchains simultaneously, unlike Ethereum. This approach, it makes it possible to integrate APIs with foreign blockchains in exchange for data feeds. It can access real-world data, payments, and events through the use of smart contracts without compromising security.
Competitors of Chainlink:
Competitors to Chainlink based upon its use cases, differences and also reliability of blockchain and ease of use of blockchain. Some of the important competitors of Chainlink are:
- Hyper Ledger
- Band Protocol