Chainlink – the blockchain oracle. The largest oracle network in the blockchain market. What functions does it provide? How can you use oracles in a web3 solution?
Overview of Blockchain Oracles
This post summarizes a series of articles dedicated to oracles in blockchain. I encourage you to familiarize yourself quickly with the concept, challenges, and security of providing off-chain data for blockchain. Links to the posts are in the comment. Chainlink is a leading technology and oracle network in the blockchain market, mainly for EVM and Solana. Chainlink currently creates several products that can be used when building a web3 solution. Here they are.
Innovative Solutions Through Chainlink
Chainlink oracles are the classic and simplest way to access off-chain data from the perspective of a smart contract. By using Chainlink, we can run our own independent node that will provide data to the contract, or we can use existing nodes in the Chainlink network for queries. The oracle enables the execution of HTTP queries, but also custom integrations (e.g., with databases). Data feeds – various data, provided by oracles, stored in the blockchain, and available for free to all smart contracts. For example, data regarding currency pair prices (BTC/USD). VRF – random data for smart contracts. If a web3 solution requires a random value, e.g., during the random allocation of NFTs, it can use VRF to obtain such a value. VRF aims at guaranteeing the correctness of the “randomness” using cryptographic techniques.
Economic Model and Security
Chainlink automation – a safe and trusted way to automatically call contract functions. By default, blockchain contracts do not have the ability to “run themselves,” and sometimes there is a need for it. The network ensures that the function will run independently at a specific time, or under specific conditions. Most of the functions offered by Chainlink require a fee in the LINK token. The fee goes to network participants who implement the functionality, making this oracle network decentralized. The Chainlink ecosystem is wide, with many network participants, and the high capitalization of the LINK token means that Chainlink is considered safe and widely used. However, it is worth remembering that the security of the oracles is accounted for by the crypto-economic model, and there is no other guarantee of correct operation. There are also other oracle providers on the market, and some web3 solutions simply use their “own” solutions (most often centralized).
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