Polkadot ecosystem, the Ethereum’s Contender - Crypto Academy / S4W7 - Homework Post for @allbert
Choose a Project, platform or service belonging to the Polkadot Ecosystem (Polkadot not permitted) and make a detailed post, which must comply with the following aspects:
1-Explain in your own words why you chose it and why do you think it is relevant to the world?
As the name suggests Chainlink is a blockchain network that connects off-chain activities with on-chain activities. In other words, Chainlink helps make data derived from off-chain sources secure and trustworthy to be registered on-chain.
It makes use of Oracles which helps to retrieve information from an external source and also verify them. It does this by rewarding members on its network that provides reliable, real-world data to smart contracts that run on a blockchain.
One thing you need to understand is that smart contracts are programmable agreements that execute when certain conditions are met. One area that smart contracts are commonly used is Decentralized Finance (Defi). However, most smart contracts need to rely on an external source of data to ensure the completeness of the transaction.
I like it also because the oracles often provide accurate data because they are all assigned a reputation score each, must follow the rules of engagement and are rewarded in the native tokens, LINK.
Its oracle network is made secure because the node operators use software that is security audited and has undergone rigorous checks to ensure that they can function at scale without the worry of downtime and corruption.
The data being used is of the highest quality and are resistant to manipulation, because they are sourced from multiple premia, authenticated APIs, that are then joined together to give a final validated answer, thus removing any single point of failure.
It is an oracle network that is widely used in the Decentralized Finance (DeFi) space in cryptocurrency and has helped to secure billions of dollars within this DeFi space. It achieved this by connecting hybrid smart contracts with data of the highest quality and off-chain computations.
Its native currency LINK has a value and this value is from the network's ability to make sure that smart contracts are successfully executed. Its blockchain network allows developers to build, test, and deploy DeFi applications that are advanced leverages external resources.
Many decentralized services are run on Chainlink's blockchain network including Data Feeds, Proof-of-Reserve, keepers, Verifiable Randomness Function, and Cross-Chain Interoperability.
New developers building an application on Chainlink are given access to external data and computation that cut across different leading blockchain networks that make use of smart contracts, thus supporting multi-chain development.
2- Description of the project and its platform. (Screenshots needed)
Chainlink is a blockchain network that provides reliable, real-world data to smart contracts that are deployed on different blockchains. It achieves this by rewarding a global network of computers on its chain.
It was created and launched in June 2017 by co-founders Steve Ellis and Sergey Nazarov. By September 2017, the white paper was published.
It uses a Proof-of-Stake consensus mechanism where oracles who want to provide data have to stake the native coin LINK to an Order-Matching contract. Before an oracle is selected it has to first submit a draft of a Service-Level Agreement (SLA). Generally, Chainlink uses 3 distinct steps to communicate between users (oracles) and data sources. They are oracle selection, data reporting, and result aggregation.
The platform is user-friendly and easy to navigate. It has an items bar which makes navigation for users to be easy. You can click on Developers, Products, Use Cases, Ecosystem, Community, and Resources depending on what information a user is looking for. I shall be looking into them each
The first item on the list is Developers. If you are a developer you can click on the item to link you to other pages that provides information for developers. When you put the mouse icon on developers, a drop-down list pops out. You have the choice of clicking any option on the list.
Also, you can click on developers and get some details about the offer for developers on the screen. When you scroll down, you would see some direct links to some pages where codes are being done. Scrolling down further there is a help link where developers can connect with experienced developers. Down further shows links where developers can get tutorials. More information is seen when you go down a little further.
The second item on the list is Products. In this item, you can't click on products. That means, when you put your mouse on the item, you have to choose from any of the options that pop out. Different options are given. This item shows the different types of products being offered on Chainlink. So depending on what a user is looking for he can click on any option.
For instance, I clicked on Market and data Feeds and I was directed to a page where things related to the market and data feeds can be seen. On the page different information concerning data and market feeds are given. When you scroll down, you get to see them one by one.
The third item is Use Cases. You can click on the item. In the process of clicking the item, when you put your mouse on the item it brings out some options. The options are DeFi and Enterprise. That is when you click on any of those options you can get information concerning the use cases of Chainlink with regards to DeFi or Enterprises.
But when you click on Use Cases, it would display a page where things about the use case of chainlink are discussed. When you scroll down you get to see how Chainlink is beneficial to different blockchains as it helps them to connect with tamper-proof data. You can also see case studies of blockchains that have used their platform to solve their data issues. Scrolling down a bit more and you would get more information about the topic.
The next item on the list is Ecosystem. Just like the item above, you can click on it and also get different options when you put your mouse on the item. The two options you get are Chainlink Ecosystem and Data providers. The Chainlink Ecosystem is a page where all the blockchains that are connected with Chainlink are displayed. While Data Providers shows a page where the companies providing data are displayed.
When you click on the item different information concerning data is displayed. You get to see some of the companies providing data. You also see information regarding becoming a node operator. You also see some useful resources built by the community.
The fifth item is Community. You can click on the item, and you also get different options when you put your mouse icon on the item. The options there are Chainlink Community, Grant Programs, and Events. Over here you can get different information regarding things that are taking place within the Chainlink community.
Clicking on the item takes you to a page where you can get information about the community. For instance, there is a section where you can become a Chainlink advocate, you can also participate in open discussions, and get to see the news. You also get to see images that move sideways as you scroll down. Scrolling down further a schedule of upcoming events is displayed and you can also see the global communities and have access to them. More information can be seen when you scroll down a little further.
The platform is user-friendly and easy to navigate. It has an items bar which makes navigation for users to be easy. You can click on Developers, Products, Use Cases, Ecosystem, Community, and Resources depending on what information a user is looking for. I shall be looking into each of them briefly.
The sixth item on the list is Resources. Just like the item the second item, you can't click on the item. But when you place your mouse icon, you get to see a drop-down list where different information regarding the resources item. You get to see Whitepaper, Blog, Education, and Featured Posts. Each of these directs you to information that is needed.
For instance when you click on the whitepaper, a page that talks more on white paper would be displayed. You can also get to see some of Chainlink's mission and services it has provided so far. You can download the whitepaper in two versions, 1.0 and 2.0. More resources concerning the whitepaper are given below.
3- Functionalities and real-life applications. (Screenshots needed)
Based on the services that Chainlink provides and the blockchains networks that are resident in Chainlink's ecosystem, these are the functions and real-life applications of Chainlink.
It functions as a blockchain network where different other enterprises and government entities can use to get the advantages that blockchain offers necessarily changing their systems.
It serves as a blockchain network that can connect smart contracts with real-world data and events. This is achieved through the Chainlinks oracles, as they help connect smart contracts to any off-chain data resource.
It provides decentralized and automation services that are reliable. This is achieved as developers are made to outsource the functions that trigger smart contracts to the nodes in their decentralized network.
Chainlink provides on-chain randomness through its Verifiable Randomness Function (VRF). It is used for the generation of NFTs, in games by distributing random rewards, etc. This function is mostly found in the gaming industry.
It helps to connect different forms of data from the real world to smart contracts of different blockchain networks.
Because of the kind of services that are being rendered by Chainlink, it is tasked with providing data that is reliable, thereby making them be trusted oracles in the DeFi space.
4- Future development and associated projects. (Screenshots needed)
Agoric is a blockchain network that uses smart contracts that are written in JavaScript-Js to help developers rapidly create a platform using its safe and reusable library of decentralized finance (defi) components which can be quickly deployed on-chain.
Synthetix is a blockchain network that provides decentralized finance (defi) protocols for cryptocurrency assets that are synthetic. It allows users to perform activities such as Trading, Staking, and Borrowing different cryptocurrency assets, equities, and commodities.
Kyber Network is a Decentralized Exchange (DEX). It uses its blockchain protocol to bring pools of liquidity together to enable liquidity in the exchange of tokens without needing an intermediary. Its platform has the dynamism to enable it to be integrated into different decentralized applications (dapps), decentralized finance (defi), and crypto-wallets.
FirmaChain is a blockchain network that aims to tackle the problems that arise from all legal and social issues, usually contracts and notarial, that are presented in written form, by converting them to an electronic form using its blockchain.
Kadena is a public blockchain that is going to optimize scalability within the blockchain industry and uses a new smart contract language feature that is called Pact. The pact comes with formal verification features and smart contracts that are upgradeable.
5- Make a technical analysis of the token of the selected platform, then through your validated exchange account make the purchase of the token (15 USD as a minimum). Screenshots and an explanation of the procedure are required.
For this exercise, I made use of Stong levels which act as either support, resistance, or breakout point on the chart. In conjunction with the strong level, I also used the Relative Strength Index. In this case, the strong level acted as a support level. I shall be giving a brief explanation below.
The price of LINK the native currency of Chainlink reached a price of 28.24 USDT during its bearish phase. After the fall in price, it increased to 28.81 USDT, then fell back to the previous price level. In the next range, the price increase stopped at 28.65 USDT. The volatility continued 2 more times before the point of my purchase.
Then on the RSI indictor had reached 35.12 which is very close to the oversold target of 30. However, the RSI line started moving in an upward direction after hitting 35.12 points. So looking at the strong support level and the RSI, I placed a buy market order at 28.53.
The order is a Market Order, this is shown as I moved it from Limit to Market on the Order interface. It is also a Spot trading activity meaning trades are executed on the spot.
I inputted 15 USDT as the amount to buy since it is the minimum requirement. Then I clicked on Buy LINK. After the execution of the order, I was given 0.52 LINK in return.
This is the summary of the trade, it gives details of the time of the trade, the pair, market type, the side of the trade, the entry price, the price of the market, etc. It also shows that the trade was executed.
Congratulations to me! The market prediction worked in my favor as the price had experienced an increase from the market entry point to the current market price of 28.74 USDT.
Conclusion
Chainlink is a very interesting blockchain platform with a lot of promises. Through its oracles, data can be fetched from the real world and be put into the blockchain industry. This powerful innovation makes it the go-to blockchain network for data processing. With its platform Non-Fungible Tokens NFTs through the gaming industry can expand more. This is made possible by its verifiable randomness function (vrf). The industry that enjoys its unique services is the decentralized finance industry, as this industry relies on smart contracts and smart contracts, which in turn, relies on data for it to run smoothly.
Because of oracle services, this makes Chainlink act as the oracle to most blockchains.
CC:@allbert