basically, contracts define the terms and obligations for an central of measure between two or more autonomous parties. Historically, a centralized arbiter is normally required to verify if those terms and conditions are met. however, thanks to the advent of blockchain technology and smart shrink applications, we can now replace centralized arbitrators with decentralize infrastructure, reducing counterparty risk and improving operational efficiency .
however, due to the consensus mechanism of blockchains, smart contracts have no built-in capabilities for interacting with external resources like data providers and API services as a means of verifying the result of real-world events happening outside the blockchain. This creates what is known as the blockchain oracle trouble and represents one of the greatest limitations to representing casual contracts on the blockchain .
To overcome this miss of connectivity, hybrid smart contracts use oracles as middleware to retrieve external data inputs, push data outputs to external systems, and perform scalable off-chain computations. not alone do oracles serve as a bipartisan bridge between smart contracts and the outside world, but they besides provide a security model for protecting against any unmarried point of failure such as data manipulation and downtime.
Chainlink is the most widely used decentralized oracle network, presently securing tens of billions in USD value for live applications across numerous blockchains and use cases. Chainlink is not a single oracle network but an ecosystem consisting of numerous decentralized prophet networks running in twin. Each oracle network can provide a battalion of prophet services without crabbed dependencies on other prophet networks, some of which include :
ultimately, Chainlink provides the necessity developer tools required to construct any type of oracle network, such as using multiple data sources, multiple oracle nodes, respective collection methods, payment penalties, reputation services, and visual image tools. This allows for a wide range of function cases to be developed, tested, and pushed into product .
access to external data opens up a hale new wave of functionality for smart contracts. To inspire you with the boundless likely of universally connected smart contracts, we put in concert a list of 77+ ways to use the Chainlink Network. If any of these ideas resonate with you or if you want to learn more, find us on Discord or Github, and check out our documentation to begin building universally connected ache contracts today .
money is the common average used today to respect and exchange assets. fiscal products provide different vehicles in which people can maximize the value of their money via unlike strategies like hedge, speculating, earning interest, collateralizing loans, and more. however, traditional finance is often gated, wherein well-capitalized entities have disproportionate control over the issue of money and the creation/offering and settlement of fiscal products. The consequence is a lack of universal approachability to certain fiscal products and the initiation of counterparty risk, where the larger entity has more influence on whether the fiscal product is fairly honored according to the pre-agreed upon terms .
Blockchains and smart contracts bring deterministic execution to fiscal products, eliminate moats around fiscal product creation, and provide tamper-proof monetary policy for on-chain assets. Chainlink oracles play a critical role in creating advanced smart contracts representing fiscal products and monetary instruments, particularly those that execute based on marketplace data like FX rates, concern rates, asset prices, indices, and more .
Blockchain-based money markets are all-important fiscal infrastructure that use ache contracts to connect lenders, who wish to earn yield on their assets, with borrowers, who wish to gain access to working das kapital. They allow users to increase the utility of their crypto holdings and participate in both the issue side and the need side. however, to ensure the solvency of the platform, price feeds are required to track the valuation of assets used on the platform as a intend of ensuring loans are issued at fair market prices and liquidations automatically occur on undercollateralized loans .
Aave, Compound, and Rari Capital are examples of on-chain money markets protocol that uses Chainlink Price Feeds to fetch market data for dozens of different on-chain cryptocurrencies. With this real-time price data, these lending/borrowing protocols can calculate the valuation of each drug user ’ s collateral and debt in decree to determine when liquidations should be initiated. This ensures the money grocery store protocols are always sufficiently collateralized, protecting tens of billions of USD value in user deposits .
Stablecoins are on-chain tokens that are pegged 1:1 to fiat currentness, normally the US dollar. They provide users with the ability to hold a non-volatile cryptocurrency. While centralize stablecoins are backed by decree in an off-chain bank history, decentralized stablecoins are normally overcollateralized by on-chain cryptocurrencies and require price data to maintain full collateralization ( e.g. a exploiter ’ s collateral is worth over 150 % the prize of their loanword ) .
DeFiDollar is an example of a decentralized meta-stablecoin ( a stablecoin backed by multiple stablecoins ) that uses Chainlink Price Feeds to track the price of the fundamental assets including sUSD, USDT, DAI, and USDC. In the event that one or multiple of these tokens deviate from their 1:1 USD peg, frankincense causing DUSD to besides lose its pin, a rebalance is triggered between the four reserves in order to preserve the dollar parity of DUSD .
alike to centralized stablecoins collateralized by dollars in a bank account or decentralized stablecoins overcollateralized by on-chain cryptocurrency, algorithmic stablecoins aim to maintain a peg equivalent to another currency like USD. however, unlike other implementations, algorithmic stablecoins maintain their peg using automated rewards and penalties to drive the price towards the peg, often by burning the stablecoin when under its peg ( deflation ) and minting more stablecoins when over its nail down ( inflation ) .
Fei Protocol is an exercise of an algorithmic stablecoin that uses Chainlink Price Feeds as the reference to set the protocol-controlled rate bonding wind for the FEI/ETH liquidity pool on Uniswap to stabilize the peg of the FEI keepsake. Through the market-wide pricing provided by the ETH/USD Price Feed, Fei Protocol can ensure the proper exchange rate is offered by the bond curve .
Futures are fiscal instruments that “ obligate ” traders to buy or sell an asset at a bias price at a specify fourth dimension in the future. normally used for hedge and leverage exposure, futures smart contracts require users to collateralize their long or light position. Price feeds are used to determine whether or not liquidations should occur, ensuring each contract is fully collateralized at all times .
dYdX and MCDEX are examples of on-chain fiscal applications that utilize Chainlink Price Feeds in order to office Perpetual Contracts, which is a Futures contract without death. By using Chainlink oracles, these protocols are able to ensure the solvency of their platform by having access to real-time price data for both determining when liquidations should occur and dynamically setting the fund rate to maintain net neutral exposure .
similar to futures contracts, options are a type of fiscal derived function that grant traders the “ option ” to buy or sell a certain measure of a particular asset by a future date if they then choose. In the off-chain global, centralized entities most frequently underwrite the contracts, but on the blockchain, decentralized peer-to-peer options are potential .
Opyn and Thales are examples of options protocols that use Chainlink Price Feeds to calculate the valuation of crypto assets, enabling users to mint, trade, and settle options contracts. additionally, Chainlink oracle nodes like dxFeed provide Implied Volatility ( IV ) data on assorted crypto assets, granting shrink creators the ability to calculate an choice ’ second contract agio in a authentic and tamper-resistant manner .
synthetic assets are a class of fiscal instruments that provide traders price vulnerability to specific assets, such as indices or commodities, without requiring ownership of the physical asset itself. Smart contract-based synthetic assets allow traders to create advanced non-custodial trading strategies and amplification photograph to traditional assets that do not exist on the blockchain .
Synthetix is an exercise of a protocol that uses Chainlink Price Feeds to enable the mint of respective “ synths ” that give up traders to gain on-chain vulnerability to assets like cryptocurrencies, decree currencies, commodities, indices, equities, and more. Through a peer-to-contract trade model, users are able to swap between these celluloid tokens with zero slippage using Chainlink Price Feeds to access the stream prize of the implicit in assets .
Credit Default Swaps
citation Default Swaps ( CDS ) are fiscal agreements that allow lenders to hedge against the potential happening of a default ( miss of payment ) from a borrower. If the borrower goes into default, the party who issued and sold the Credit Default Swap reimburses the lender for the outstanding funds not paid by the borrower .
Opium.Exchange is an exemplar of an on-chain protocol that uses Chainlink Price Feeds to settle assorted fiscal instrumental role products. One of these products includes a Credit Default Swap on the centralized stablecoin USDT Tether, allowing traders to hedge against Tether deviate and falling below its $ 1 peg .
Bonds are a fiscal agreement that enables the elevation of short-run capital by issuing debt to be paid back at a subsequently date. traditional bond contracts can be replicated as an automated smart sign through the use of Chainlink oracles, which provide the datum required for liquidation such as interest rates, debt scores, decree payments, and more .
Chainlink has already demonstrated such capability with a POC with SWIFT, where oracles were used to aggregate interest rates from five major banks, fetch debt grudge data from S & P, and generate an interest requital in the phase of an ISO20022 SWIFT payment message. As a multi-trillion dollar diligence, bringing bonds onto the blockchain can greatly reduce counterparty gamble and lower operational costs across the board .
Tokenized Portfolio Management
A alone use font for fresh contracts is non-custodial “ smart portfolios ” that mechanically rebalance user portfolios by executing trades on their behalf based on preset conditions. This provides users with advanced fiscal products that programmatically manage investments based on the current market-wide price of specific assets and tokens. These trade strategies can be tokenized, allowing users to transfer and use these tokens within early smart condense applications .
Tokensets is one such example of a protocol that uses Chainlink Price Feeds to generate versatile “ Sets, ” tokenized positions that execute trades on the behalf of users. These Sets are based on technical Analysis ( TA ) metrics such as the RSI or moving averages, designed to catch key price action trends. additionally, users can use their set tokens as collateral within other protocols, such as the Aave money market, to gain extra das kapital efficiency .
Proof of On-Chain Reserve
Wrapped cross-chain assets—cryptocurrencies/tokens native to one blockchain that are locked into a narrow and then “ unlocked ” on another blockchain—are becoming increasingly popular due to their ability to increase the collateral types available within the DeFi ecosystem. however, in order to ensure the integrity of DeFi applications supporting wrapped asset deposits, Proof of Reserve reference contracts can be used to supply data regarding the true collateralization of these on-chain assets .
Two protocols using Chainlink to power Proof of Reserve reference feeds include BitGo ’ south WBTC and Ren Protocol ’ south renBTC, representing a large majority of the wind Bitcoin on Ethereum and representing billions in USD value. These Proof of Reserve citation feeds provide DeFi protocols with the data they need to autonomously verify collateral reserves and swiftly protect user funds during an undercollateralization event. Proof of Reserve reference feeds can besides be used to track the collateralization of assets beyond cross-chain tokens including stablecoins and real-world commodities, far increasing the collateral available within DeFi .
Proof of Off-Chain Reserve
Bringing real-world assets onto the blockchain provides a big electric potential to expand the economic action of DeFi, as seen with the borrowing of fiat-backed stablecoins. however, this requires the fundamental collateral to be held by a central custodian, disconnecting the on-chain tokenized representation from the actual off-chain asset itself. Through Chainlink Proof of Reserve, chic contacts are able to autonomously audit the collateralization of real-world asset-backed tokens, protecting users during black swan events .
Examples of this are the Paxos Proof of Reserve for PAX and PAXG deoxyadenosine monophosphate well as the TrustToken Proof of Reserve for TUSD. The latter provides DeFi applications with data regarding the true sum of US dollars backing the stablecoin TUSD held by TrustToken ’ s off-chain escrowed bank accounts as reviewed by Armanino, an independent top-25 auditing firm in the United States. This collateralization data can be checked against the full total of circulating TUSD tokens on versatile blockchains, as reported by the complemental TUSD Proof of Supply feed, to determine the collateralization of TrustToken ’ s tokenized USD .
Automated Asset Management
bright contracts can be used to mechanically execute trade strategies at bias intervals. however, a scope of variables can influence the profitableness of those strategies, specifically network accelerator costs. thus, traders using automated systems need authentic data from oracles in order to ensure that their trades will be systematically profitable .
Visor Finance is one exemplar of a protocol using Chainlink Keepers, a decentralized transaction automation servicing, to rebalance fluidity position on Uniswap V3 when predefined thresholds are crossed. New and existing capital is strategically re-allocated between active fluidity positions and single asset restrict orders, allowing the protocol to maintain the highest possible asset use .
As an increasing number of DeFi products launching with DAO ( Decentralized Autonomous Organization ) government, there becomes more of a indigence for developers and community members to distribute the gross generated by a DeFi protocol in a decentralized and real-time manner. Through the custom of Chainlink oracles, DAOs can distribute crypto revenues proportionately according to versatile metrics, such as bet on coins, administration participation, developer activity, or any custom-make set of requirements .
Synthetix is one example of a DeFi protocol that will use Chainlink Keepers to automate the distribution of rally fees and staking rewards each week to users. Chainlink Keepers will monitor the ache contract ’ s submit off-chain and autonomously call the tip distribution function in the protocol ’ randomness feePools smart contract after the fee period duration has ended .
yield Farming is a fresh fiscal primitive within the DeFi ecosystem that is used to bootstrap liquid and facilitate the fairly distribution of a protocol ’ mho government tokens. In most give grow applications, users who provide liquidity to the protocol are granted a reward in the form of the protocol ’ s native administration keepsake, serving as a growth subsidy .
Two protocols using Chainlink oracles for their give Farming mechanism are Plasm and StrongBlock. Plasm uses Chainlink price oracles to determine the sum of value users have locked into the protocol and distribute rewards accordingly, while StrongBlock calculates the USD measure locked in Community pools at the end of every 24 hours .
Leveraged Yield Farming
Users can increase their concede and capital efficiency by using leverage yield farm protocols that lend depositors capital through protocol-controlled undercollateralized loans. With these positions, borrowers can maximize the value of their assets through versatile yield farming strategies while lenders earn a passive income from borrowers who want to amplify their farming positions. This results in an application-specific money market specially focused around the activity of yield agrarian .
Alpaca Finance is one exemplar of a protocol using Chainlink Price Feeds to enable users to leverage up their positions on PancakeSwap and WaultSwap by borrowing capital to increase their positions. fiscal market data from Price Feeds is used to calculate proper collateralization ratios during lend issue and neutralize positions to ensure the long-run solvency of the protocol, even during market volatility in the evaluation of the collateral deposited by borrowers .
Cross-Chain Yield Farming
As the DeFi ecosystem continues to expand across a phone number of blockchain networks, the opportunity for generating output from existing protocols like Aave will fractionalize across unplug environments. In order to overcome this emergence, a cross-chain token bridge is required to facilitate the transfer of exploiter funds across networks. however, existing cross-chain solutions are vulnerable to exploitation, with hundreds of millions of dollars already having been siphoned from such protocols. The Cross-Chain Interoperability Protocol ( CCIP ), a plug open-source standard for transferring messages and tokens across blockchain networks, overcomes these issues and will provide developers with the tamper-resistant infrastructure required to create multi-chain move over earning platforms .
Celsius, a leading cryptocurrency yield earning platform with closely a million users and over $ 16 billion in sum rate locked, will integrate CCIP to future-proof the platform and enable the reap of concede across the multi-chain DeFi ecosystem. Celsius besides uses Chainlink Price Feeds in its backend system to determine the borrowing rates of users when depositing collateral, aiding the progressive decentralization of the platform .
As a raw DeFi-enabled fiscal primitive, self-paying lend protocols enable users to deposit assets as collateral and borrow/mint synthetic assets to provide working capital. The lodge collateral is routed to a yield generating protocol, where the give is used to mechanically pay down the debt over time, creating a highly capital-efficient borrowing position .
One implementation of this new fiscal primitive is Alchemix, a self-paying loanword protocol that uses Chainlink Price Feeds and Chainlink Keepers to provide users an advance on their future give over fourth dimension for deposits of DAI and ETH. Price Feeds are used to issue loans at bazaar market prices and ensure users are systematically maintaining healthy collateralization ratios. Keepers are used to trigger vault reap and vault flushing each day, automating debt repayment and reallocating new depositing into Yearn Finance to generate output .
In certain instances of exceptionally high volatility, the prices for assets on a cryptocurrency change may cease to reflect the prices seen on the broad market. This can lead to a loss of funds to arbitrageurs, or to users getting wrongly liquidated due to leverage positions they had open. such occurrences can reduce drug user trust in an exchange. Exchanges can benefit from using a circumference breaker that trips should certain deviations occur .
Digitex is an model of a traditional commute that protects users from marketplace handling by monitoring for diversion between their internal price feeds and Chainlink Price Feeds as an extra layer of security for users trading on the platform. If the substitute ’ s price deviates beyond a certain percentage from the wide grocery store price reported by Chainlink oracles, a “ racing circuit breaker ” can be triggered to temporarily halt trading and liquidations .
Decentralized exchanges ( DEXs ) are on-chain trade venues that allow users to trade cryptocurrencies without taking hands of those assets or giving out personal data to a centralized institution. As DEXs develop in popularity, the desire for traditional deal strategies and gain features presently available on traditional centralize exchanges grows in importance .
0x Relayer Bamboo Relay is an example of a decentralize switch over that uses Chainlink Price Feeds to power stop-loss order functionalities—conditional trading functions based on the price action of an asset. With aggregate marketplace data from Chainlink, each trader ’ randomness stop-loss arrange will alone be executed when the market-wide price of the asset surpasses a sealed predefined doorsill, preventing market manipulation attacks from falsely executing trades .
Automated Market Makers
automated market Makers ( AMMs ) are an increasingly popular category of decentralize exchanges. rather of traditional order books, AMMs are on-chain liquid pools that facilitate asset swaps based on a bias price rule. By pooling capital, fluidity providers are able to earn passive voice give way and traders gain access to on-demand fluidity .
DODO is an example of an AMM protocol that uses Chainlink Price Feeds to ability a newly AMM design known as a proactive market Maker. DODO ’ s PMM mimics human market-making behaviors and gathers more das kapital near the market price reported by Chainlink in order to facilitate more efficient and frequent deal .
many protocols rely on some imprint of staking—the lock in of cryptocurrency collateral into a bright contract—in order to secure their crypto-economic networks. Staked collateral might help signal where rewards should be proportionately distributed, or it can be “ slash ” —programmatically taken under certain conditions as a mean of disincentivizing malicious behaviors .
For exemplify, AdEx requires its validator nodes to impale collateral and maintain high handiness. AdEx uses Chainlink oracles to monitor node uptime and trigger the slash of collateral should any node fall below the uptime requirements. This ensures that only high-quality node operators participate in the network, which in turn enhances the security of the entire chopine .
Rebasing is a modern fiscal crude within DeFi that involves the act of adjusting the supply of a nominal as a means to maintain its peg to a specific citation asset, such as the US dollar. If the price of the token is above its peg during the rebase, then more tokens are minted and given proportionately to all token holders with the goal of lowering the per token price. conversely, if the price of the nominal is below the peg, then a certain share of each holder ’ randomness tokens are burned to raise the per token price .
Ampleforth is an model of a protocol that uses Chainlink Price Feeds to power its native rebasing functionality. The total add of AMPL is rebased on a day by day basis to track the stream Consumer Price Index ( CPI ) rate, an index from the Bureau of Economic Analysis on the current value of the inflation-adjusted 2019 US dollar. Both the volume-weighted average price of AMPL and the CPI index are provided to the Ampleforth protocol by Chainlink oracles .
As discussed in our holocene education while, tokenized real-world assets are among the most promise use cases for blockchain and fresh abridge engineering. They take real-world assets and represent them on the blockchain as a token. Compared to traditional assets, tokenized assets benefit from ball-shaped handiness, permissionless liquid, on-chain transparency, and reduced transactional clash .
Blockchain money markets are normally overcollateralized to ensure drug user loans can be properly liquidated when the collateral drops in measure and/or the debt rises in value, thereby keeping exploiter funds in the market safe. however, because smart contracts are “ asleep ” by default, liquidations need to be performed by an external party to “ wake up ” the condense to close a position by paying down the debt. The process needs to be highly authentic to ensure no toxic loan positions on created and left open .
Aave is one model of a money market protocol with tens of billions of dollars in exploiter deposits that will use Chainlink Keepers to automate the liquidation of drug user positions. Chainlink Keepers will monitor the collateralization ratio of drug user positions, and if any position falls below the predefined threshold of the collateral ( e.g. 150 % ), the decentralized Chainlink Keeper Network will call the elimination function and close the position, even during heavy market excitability and blockchain network congestion .
It ’ s easy for smart contracts to issue payments in the cryptocurrency of their native blockchain, such as Ethereum smart contracts issuing payments in ETH, for exercise. however, many businesses can ’ metric ton afford the risk of holding volatile cryptocurrency assets on their counterweight sheet. They besides don ’ thyroxine want the extra friction of trading out cryptocurrency for their preferable decree currentness. Given the wide variety of requital preferences around the earth, smart contracts need entree to many types of payment options to adequately service ball-shaped demand. Chainlink can facilitate a wide-eyed kind of payment services thanks to its ability to push outputs from smart contracts to external APIs .
Chainlink enables chic contracts to connect to existing banking systems, allowing smart contract developers to seamlessly integrate information and services such as consumer deposit accounts, direct deposit, and other processes from leading global banks .
many consumer applications such as Uber and AirBnB offer popular retail payments to users. Chainlink can bring the lapp facilitate of function to smart contracts by giving them access to leading credit rating tease providers and established payment networks, like PayPal and Stripe. Developers can start build applications that take advantage of the most in-demand payment outputs, both domestically and internationally, used on a day by day basis in the retail economy. Chainlink already has pre-built modular external adapters for popular retail requital rails such as PayPal and Mistertango .
Cryptocurrency is becoming increasingly popular, but some of the popular choices are often disconnected from the leading bright sign platforms. Chainlink bridges the gap by allowing any smart sign platform to make payments on any early distributed daybook, such as Bitcoin payments triggered from the Ethereum blockchain. additionally, Chainlink Price Feeds can be used to provide exchange rates at the time of transfer or point of sale, ensuring users get fair commercialize rates in a tamper-proof manner .
Alchemy and Paycoin are examples of hybrid crypto/fiat requital platforms that will use Chainlink Price Feeds to determine substitute rates, allowing users to pay with a wide compass of cryptocurrencies while the merchant still receives their choose phase of payment .
One significant source of inefficiency across about all industries in the bequest global is the delay in payments for services rendered to employees and contractors. Chainlink-powered ache contracts can be used to programmatically distribute payments to workers in real-time, which would reduce accounting overhead costs for employers, adenine well as providing access to earned wages for workers on a more immediate basis .
Fiat on/off-ramp collector Transak laid out how this could work by using a influence tracking API like WakaTime to trigger payments to developers on a regular basis. additionally, Chainlink Price Feeds can be used to calculate the claim sum of crypto gross to distribute, maintaining a certain USD value per payout .
Remittances are quite park in an increasingly globalize universe. however, despite advancements in engineering, it ’ s a decelerate and expensive diligence. many DLT projects are aiming to disrupt the remittance diligence and Chainlink oracles can provide authentic data on alien exchange rates to smart contracts arsenic well as enable target sediment upon transfer .
NFTs, Gaming, and Randomness
While DeFi is presently the largest smart contract grocery store, developers are increasingly building fraudproof, crypto-economically incentivized gambling applications. One of the singular characteristics of blockchain games is their ability to generate rare tokenized in-game items ( largely as NFTs ), as the blockchain provides definite proof of the item ’ s curio. Minting these rare items in a manner that the external entities or the game ’ mho developers can manipulate to their own advantage is key to ensuring their value, which is why Chainlink developed a verifiable randomness Function ( VRF ). Chainlink VRF is a secure and demonstrably fair source of Random Number Generation ( RNG ), which generates on-chain cryptanalytic proof to prove to users that the randomness was not tampered with .
Their demonstrably fair imprint of randomness brings dependability to the curio of items, opening up things like virtual metaverses, where tokenized items can be faithfully used across different games. verifiable randomness is besides critical to creating undisputed fairness to regulated gamble applications, removing the need to trust that the house is telling the truth about their odds. additionally, Chainlink VRF can order participants for in-demand giveaways and events or reasonably choose participants for low-demand events like jury duty in an unbiased manner. Beyond randomness, gaming can benefit from numerous data sets, such as real-world event data to augment in-game functions/ratings, exchange rates to facilitate NFT markets, IoT data to connect the physical populace on-chain, and much more .
Random Rewards and NFTs
In-game items are a critical component of most games, as they provide users with particular powers or singular attributes. many in-game items are issued as non-fungible tokens ( NFTs ), a keepsake that is alone and not exchangeable. Chainlink VRF is already playing an authoritative character in generating demonstrably random NFTs and creating NFT attributes as rewards for different predefined in-game achievements, such as earning a rare clamber for finishing in the top 10 .
Aavegotchi is an example of an on-chain gambling stick out on the Polygon sidechain that used Chainlink VRF to quickly and efficiently batch demonstrably rare Aavegotchi NFTs with randomly selected attributes when players opened Portals. Another model is Ether Legends, a digital collectible trading menu bet on that uses Chainlink VRF to randomly distribute rare crypto-backed NFT prizes to top-tier players at the end of a season. popular gaming dApp Axie Infinity besides recently announced that it is using Chainlink VRF to generate demonstrably random traits for Origin Axies within the game ’ s digital pet universe .
moral force NFTs elaborate upon the concept of NFTs by enabling such tokens to evolve and change over time as determined by real-world events or confirmable randomness delivered by Chainlink oracles. Compared to static NFTs, which do not change after minting, dynamic NFTs can change in curio and utility over time, providing a gamified experience to collecting NFTs .
MLB headliner Trey Mancini and NBA Rookie of the Year LaMelo Ball are two examples of athletes who have minted Dynamic NFTs powered by Chainlink oracles on the Ethereum blockchain. With the former, the NFTs are represented as limited-edition digital baseball cards that use Chainlink VRF to assign extra utility to NFTs in a verifiably fair and indifferent manner, with all NFT sale proceeds going to cancer research. For the latter, the NFTs upgrade over time according to the player ’ second performance in the real worldly concern, where the EVOLVE tokens were activated when LaMelo Ball was selected as the NBA Rookie of the class .
volatility is one of the hallmarks of fun games. The agitation of not knowing the following stage or what will happen around the corner creates suspense, intrigue, and challenge. Developers can leverage Chainlink VRF to ensure the integrity of irregular events. Some of these gameplay scenarios may include map generation, critical hits ( battling games ), matchmaking ( multiplayer games ), wag draw club, and random encounters/events .
Blockchain prediction markets enable individuals to bet on the consequence of specific real-world events. Due to their very nature, blockchain-based prediction markets, are reliant on external data to settle result. Chainlink Data Feeds provide a decentralized, tamper-resistant source of external data that can be used to trigger the settlement of prediction markets a well as requital to the winners. prediction markets have been created around sporting events results, political election outcomes, and cryptocurrency roadmap completions and price predictions, but ultimately prediction markets can encompass any type of stake ampere hanker as there are takers on the other side .
Along with Chainlink Data Feeds, Chainlink Keepers are increasingly playing a key function in enhancing the security and decentralization of prediction markets. alternatively of relying on DevOps teams, centralized automation bots like cron jobs, or incentive bounties to start and stop each prediction round and select the winner, Chainlink Keepers can automate smart contract functions by triggering bright contracts in a highly authentic, cost-efficient, and decentralized manner. Learn more in the Chainlink Keepers developer documentation .
not only do Chainlink Keepers save developers hundreds of hours, they besides significantly enhance the security of prediction markets. By integrating Chainlink Keepers into their prediction games to help start and stop prediction rounds and distribute rewards to winners, Entropyfi eliminated a unmarried luff of bankruptcy and was able to save 20 technology hours per week .
Everipedia, a blockchain-based encyclopedia, recently used Chainlink to relay election results on-chain to help settle prediction markets. Everipedia operates a Chainlink prophet node and delivered cryptographically signed data from The Associated Press regarding the results of the 2020 U.S. presidential election onto the Ethereum blockchain, where Chainlink Data Feeds were then used by on-chain prediction markets such as YieldWars .
No-Loss Savings Games
Advancements in DeFi composability have led to innovative applications such as no-loss savings games—dApps which pool user deposits and lend them out on a decentralize money market in rate to accrue interest. After a stipulate time frame, a winner is selected, earning all the accumulate matter to from the pool. After the winner is chosen, all users are able to withdraw their original deposit without any loss .
An exercise of this is PoolTogether, an on-chain no-loss savings game that uses Chainlink VRF to select the achiever of each trophy. By utilizing a crystalline and confirmable beginning of on-chain randomness, users are provided a higher academic degree of trust in the overall dependability and paleness of the no-loss loot consortium platform .
Sports and Esports
Smart contracts provide integrity to the execution of an on-line sports bet, while Chainlink decentralized oracle networks can verify sporting outcomes by aggregating data from dependable network APIs. These smart contracts ( normally in the form of prediction markets ) can be based on a match ’ randomness solution, individual performances, or even something as apparently inconsequential as a game ’ s opening coin chuck. On exceed of that, it ’ s possible for eSports prediction markets to retrieve gambling data and broadcast it on-chain to determine the winners .
One exercise of a blockchain-based sports betting market is Augur, which uses Chainlink oracles on the high-throughput Polygon sidechain to power its Turbo prediction markets. Users can speculate on the result of a wide-eyed stove of topics including different sports events in the NBA, MLB, MMA, and Olympics that are quickly settled after a grocery store closes using decentralized prophet networks that provide agio real-world data .
The indemnity industry today operates in a low-trust business environment. Policyholders have an bonus to falsely report positive metrics in policy applications to reduce their monthly deductibles and insurers have an incentive to delay payments and raise rates to account for fudge hazard profiles. Since indemnity companies are responsible for processing claims and are much more capitalize than policyholders, they wield substantially more ability in terms of when and how claims are settled. Chainlink-powered smart contracts shift policy contracts towards a more objective, equal-standing exemplar where data directly determines the outcomes and murder is deterministic, without tampering by either party .
traditional insurance firms can leverage the benefits of blockchain engineering by creating promote bright contract-based parametric policy agreements that mechanically trigger payouts based on real-world data as delivered by decentralized oracle networks. By reducing reliance on manual arbitration and mitigating delayed payments as a solution, coverage can be provided to a broader range of businesses to hedge a broad range of risks that exist in the real world .
Crop policy has long been considered an specially predict use case for smart contracts as it provides farmers in developing nations with insurance which they otherwise could not get access to or don ’ t trust due to underdevelop local policy markets. By providing anyone with an Internet association the ability to hedge against unanticipated upwind conditions, farmers all over the world are able to maintain their support without the concern that one bad weather season could cause fiscal ruin .
One exercise of this is Arbol, a smart contract-based weather coverage solution that uses Chainlink oracles to fetch rain datasets from the National Oceanic and Atmospheric Administration ( NOAA ). This datum is used to settle parametric craw insurance contracts that provide coverage based on the measure of rain in the area .
One of the earliest forms of smart narrow insurance to reach output is fledge insurance. Due to a range of indocile variables such as weather and maintenance, flights are much delayed, leading to inconveniences for business travelers. Flight insurance policies allow travelers to mitigate these opportunity costs, as they pay out compensation in the consequence of a delay .
One exemplar is Etherisc, a decentralized policy protocol that leverages Chainlink oracles to retrieve fledge data in order to confirm whether or not it ’ south been delayed. By removing the necessitate for challenge periods, insurees are guaranteed that they will immediately receive a requital if their flight was delayed and insurers are able to reduce costs by removing manual claims processing.
modern vehicles come with a wide range of internal sensors, internet connectivity, and even native APIs. The achiever of Chainlink ’ sulfur 2020 Virtual Hackathon, Link My Ride, made consumption of some of these data points, allowing the smart contract to specify a rental period, unlock the vehicle doors for the tenant, phonograph record the length of clock time rented, count mileage drive, determine the remaining battery charge, and automatize rental payments. These functionalities came together to create a complex car rental contract for a Tesla vehicle using a custom external arranger. As vehicle-based APIs grow more sophisticate, fresh forms of policy will become available including parametric car indemnity that triggers based on numerous impact sensors in the vehicle or insurance discounts based on metrics like mileage driven per class .
The growing “ smart home ” phenomenon is leading to sensors and advance security systems that automatically inform homeowners and emergency services of strange events. These sensors can be connected to smart contracts through Chainlink oracles in order to create newfangled parametric home plate indemnity products. specially utilitarian for vacation homes and other residences that are not used year-round, insurance products can be wired to detect break pipes, malfunctioning solar panels, or even base intrusions as a mean of a more direct skin-in-the-game alarm organization protection from companies .
Smart contracts with fathom data are ideal for reducing the costs and happening of disputes, american samoa well as speeding up the time of settlement. numerous world wide web APIs and external databases host sufficient data for determining if and when a death occurred, such as end certificates, obituaries, cremation records, and police reports. Chainlink can use that data to autonomously issue out payments and distribute assets amongst respective parties listed in a life sentence insurance policy, eliminating unnecessary overhead and accelerating payments to policyholders .
due to countless advancements in biotechnology and IoT wearables ( e.g. Smartwatches ), insurance companies can create ache contracts that offer health insurance discounts or trigger penalties based on a affected role ’ s health data. Useful datum points can include outdistance traveled ( practice ), body weight, center pace, and possibly more advanced biometrics as they are made available into the future. Chainlink oracles can besides spot data anomalies that can trigger mandatary consultations in order to keep favorable policy rates .
Gran Fondo, an ETHDenver 2019 Hackathon entry, used Chainlink oracles to bring GPS time-stamped data from IoT clothing devices on-chain to enable the creation of on-chain athletic competitions that payout in ETH. This same claim data can besides be used to create health indemnity contracts that determine premium rates based on the amount of physical activeness within a certain time frame as recorded by the Chainlink-connected IoT clothing device .
Climate-related uncertainty is leading to increasingly irregular seaway conditions such as low or high water levels. This can result in hundreds of millions of dollars lost due to the impermanent completion of major shipping seaway channels. smart contracts can use Chainlink oracles to connect to an array of real-world sensors to issue parametric insurance coverage for a wide range of coverage protections, such as the dissolve of freeze goods during passage, damages to shipping vessels, or late shipments due to unanticipated upwind conditions .
One exercise of this is a hackathon project aimed to insure cargo carriers in the event of the climate change-related settlement of major ship routes. Chainlink oracles connected to water level sensors that trigger indemnity payouts in the event of water drop or rising above present levels determined to lead to waterway closures .
indemnity is a difficult diligence for likely entrepreneurs to enter because of the risks associated with underwriting boastfully numbers of policies. In a catastrophic consequence, an insurance company may be ineffective to cover all obligations, leading to default. As such, many companies “ reinsure ” their cover portfolio—offloading a fortune of their risk in case they can not cover all claims .
One potential solution would be to tokenize reinsurance policies as smart contracts. This would allow individual investors to back policy policies by buying fractions of a policy. Chainlink oracles can be used within this process to denominate the current value of an indemnity policy, route insurance payments to token holders, and autonomously trigger policy payouts .
Smart contracts provide ample opportunities for enterprises to cut costs and improve efficiency in multi-party business processes thanks to reductions in counterparty hazard, mediator overhead, and external disputes. however, in order to leverage ache contracts, enterprises require extra considerations around privacy, scalability, and connectivity in order to meet certain business and legal requirements. Chainlink provides a gateway for enterprises to both sell their data and API services to blockchain environments and satisfy sealed technical requirements like on-chain access to private data, off-chain calculation of abridge logic, on-chain privacy of transactions, and much more .
Blockchain Abstraction Layer
barely as the Internet acts as a single gateway for connecting computers, Chainlink provides enterprises with a single middleware for connecting their apis to every blockchain environment. Chainlink is blockchain agnostic and can be integrated onto any current and future blockchain, with many leading chains already supporting Chainlink, such as Ethereum, Polkadot, Avalanche, Binance Smart Chain, Polygon, Optimism, Arbitrum, and more. By having Chainlink operate across all the major chains, enterprises can leverage it as a “ blockchain abstraction layer ” used to get their existing systems “ blockchain-enabled ” across any/all chains efficiently .
This reduces integration work to a minimum thus enterprises preceptor ’ thyroxine have to rebuild existing infrastructure, but rather can focus on their core blockchain scheme. Vendor lock-in is limited by removing the charge of enterprises to choose which blockchain is the most likely to become the industry standard. additionally, Chainlink nodes provide key advantages such as guarantee individual samara management, secure off-chain calculation, trust-minimized hardware, permission controls, and more .
Monetization of Data and APIs
Chainlink ’ s built-in flexibility ensures it ’ s in full compatible with existing bequest data and API infrastructure. thus, data providers can besides use Chainlink ’ s blockchain abstraction level to sell their data to smart contracts on any blockchain. This can be done in two ways : sell data to the Chainlink Network or the data provider running their own Chainlink oracle lymph node to sell data directly to blockchains .
By selling data to the Chainlink Network, data providers don ’ t need to change anything about their current commercial enterprise model, meaning back-end modifications aren ’ triiodothyronine necessary and they can accept payments in decree currentness. alternatively, data providers who see the prize in the ache sign economy can run a Chainlink Node to provide signed data ( using digital signatures ) directly to smart contracts, allowing them to earn more tax income and build a repute as a authentic data provider .
Operating a Chainlink lymph node enables data providers to begin selling their API connections to smart contracts applications. To simplify the experience of launching a Chainlink oracle node, infrastructure providers can offer Node-as-Service ( NaaS ) solutions in order to cursorily spin up raw Chainlink nodes and connect a datum provider ’ mho existing APIs to blockchain networks in a backward-compatible manner .
Amazon Web Services ( AWS ) is an exemplar of a leading cloud supplier that has collaborated with Chainlink Labs to launch the AWS Chainlink Quickstart—a one-click work flow for data providers and DevOps teams to easily launch a Chainlink oracle node on AWS Cloud and sell real-world data to smart contracts across multiple blockchain networks. The future-proof framework enables data providers to seamlessly launch a Chainlink node on AWS, allowing them to cryptographically sign their data and broadcast it onto blockchains where it can be sold to smart contract applications .
Hybrid Cloud/Blockchain Applications
As smart contracts evolve, there becomes an increasing demand for more gain decentralized applications that require expensive or building complex computations which are not feasible on-chain. One solution is using oracles to attest to off-chain computations processed within more scalable mottle computing environments. Leveraging Chainlink ’ s bidirectional communication capabilities, hybrid cloud/blockchain applications can be created that road computational instructions and/or data off-chain for action, american samoa well as bridge the results back on-chain for smart condense use .
One case is NOAA weather hosted on Google Cloud which is being brought onto the Etheruem blockchain using Chainlink oracles. Through this integration, chic contracts can access high-quality weather data ( temperature, precipitation, hail, etc ) to world power parametric crop insurance agreements such as those offered by Arbol .
Privacy-Preserving Data Queries and Credential Management
For many enterprises and institutions, data privacy is not an optional bonus but alternatively a rigorous requirement necessary to meet regulative mandates such as GDPR. Chainlink is developing a up-to-date solution to this challenge through the holocene learning of DECO —a privacy-preserving prophet technology created by an Ari Juels-led team at Cornell University .
DECO allows all data transmitted over HTTPS/TLS, which is most of the world ’ sulfur data, to be confidentially attested to by oracles without the data ever being revealed on-chain ( it never leaves the off-chain database ) and without any modifications to the servers hosting the off-chain data. For exercise, Alice is able to use DECO to prove her deposit account balance is above a certain brink without revealing her exact explanation balance or her identity on-chain or to the oracle itself. This opens up closely all of the world ’ randomness data to be leveraged on-chain while hush retaining confidentiality and data license agreements .
On-Chain Transaction Privacy
In addition to privacy of data inputs, many enterprises want privacy of contract logic and outputs. Chainlink has developed a way of using oracles to provide on-chain transaction privacy for DeFi smart contracts via a solution called Mixicles. Mixicles separate the on-chain data inputs from on-chain payment outputs, using an oracle as the bridge between the two components and a transaction mixer. alternatively of delivering the raw data input on-chain, Chainlink oracles post an integer representation that only has mean to the narrow participants ( e.g. a 1 or 2 as seen in the example below ). A mixer can then take that integer remark to execute a payout to a party that is concealed, so far inactive produces an on-chain audit report for users as a mean of meeting regulative requirements. The Mixicles protocol is able to achieve multiple layers of privacy, such as concealing the terms of the narrow, the data generator used, the true value of funds within the contract, and who received the payment ( in terms of correlation to the remark ) .
Private Off-Chain Computation
Chainlink practices a defense-in-depth approach to security system, where users leverage multiple layers of security to get a variety show of guarantees. Another solution being developed by Chainlink is Town Crier, an oracle protocol that uses extra hardware in the shape of a hope murder environment ( TEE ) to achieve private, popularize off-chain calculation .
Town Crier uses TEE-based oracles ( specifically Intel SGX ) to enable Chainlink oracle nodes to perform advanced computations on data within a black box environment where data can not be leaked, even to the node operator. Town Crier provides both data confidentiality and calculation integrity, opening up new oracle use cases like handling private keys for cryptocurrency payments or user login credentials for identity verifications .
As smart contracts continue to accelerate in borrowing, there is an increasing requirement for hardheaded scale solutions that can boost the throughput and lower the reaction time of decentralize applications, while retaining base-layer security of drug user funds. normally these layer-2 scalability solutions require the being of one or more off-chain validator nodes that are responsible for batching transactions and delivering a compendious response onto the base-layer chain as needed .
Chainlink oracle nodes are compute-enabled and can serve as validators for layer-2 solutions, such as for Offchain Labs ’ Arbitrum Rollups. Chainlink nodes can perform Arbitrum calculation of Solidity functions, render fraud validation, and stake LINK collateral to back their services without any modifications. The end consequence is using oracles not precisely for data inputs, but for performing scalable off-chain Solidity calculation besides .
Infrastructure Provider Oracle Nodes
Blockchains require a decentralize network of infrastructure providers such as validators, sequencers, transcoders, and oracles. traditional infrastructure providers, such as telecommunications firms or internet service providers, can support the Chainlink Network and earn extra gross by directly operating a Chainlink oracle node. By leveraging their exist in-house infrastructure, such providers can provide highly dependable oracle services and monetize the growth of the loanblend fresh contract ecosystem .
T-Systems MMS, a subsidiary company of Deutsche Telekom ( Europe ’ second largest telecommunications supplier ) operates a Chainlink oracle node and provides fiscal market data to numerous leading DeFi applications. As the demand for universally connected fresh contracts continues to grow, the gross opportunities can increase, leading to extra infrastructure providers launching Chainlink nodes .
“ By operating a Chainlink node, T-Systems MMS will provide reliable real-world data to Chainlink network users and decentralized applications ( dApps ) on Ethereum, foster supporting the imagination of public blockchains as a initiation for numerous use cases such as Decentralized Finance ( DeFi ). ” – T-Systems MMS
Abstract Cryptocurrency Payments Through Invoicing
Given the bangle, volatility, and regulative uncertainties around cryptocurrencies/tokens, some enterprises are presently hesitant to personally hold and handle cryptocurrencies. With most blockchain infrastructure requiring cryptocurrency to operate, enterprise adoption still remains limited or even completely blocked off. alternatively of waiting on the often slowly legal system to resolve the issue or for enterprises to warm up to the idea, Chainlink oracles can be used as a workaround to the problem using park invoicing techniques widely used today to allow them to pay third service providers in decree, which then handle cryptocurrency payments in the background .
Hackathon project LINK Gas Station takes the concept of Meta-Transactions —where blockchain transaction fees are abstracted away and paid by a relayer—and applies it to Chainlink. It uses third-party relayers to manage ownership of the utility tokens LINK and ETH, both of which are needed to pay for Ethereum calculation and obtain Chainlink oracle data services. By doing thus, the liability and complexity of cryptocurrency possession shifts away from the enterprise and onto the chosen relayer, resulting in a action where an enterprise can plainly pay an invoice in decree and gain access to the entire decentralized ecosystem. importantly, enterprises still have broad control over the cryptanalytic secret key required to sign-off on transactions .
External Data for Baseline Protocol
Baseline Protocol is a framework for syncing enterprise systems of commemorate using the Ethereum mainnet as a common frame of reference. baseline uses zero-knowledge proof to ensure disparate enterprise databases are kept in a state of consistency ( lapp determined of records ) with their counterparties without revealing any confidential data on-chain .
Chainlink oracles are a key piece of infrastructure for ensuring Baseline events are using the same external data inputs. For exemplar, moral force purchase orders can leverage Chainlink oracles to fetch aggregate weather data ( from multiple sources ) regarding the temperature of the goods being shipped. The price per item in the purchase order can be autonomously update depending on the temperature, such as bananas with dynamic price based on weather conditions. Chainlink ’ s ability to create consistency around external data inputs creates consistency among business partners, reducing disagreements and reconciliation .
Bootstrap Legacy System Security
As outlined in the whitepaper, Chainlink will use service level agreements ( SLAs ) and staking to create extra security system and crypto-economic guarantees for oracle services. The SLA, which exists on-chain and is signed by both parties, defines the terms of the prophet service and the penalties/rewards issued based on the prophet ’ mho performance. The results of the SLAs can be fed into repute systems where future users can assess the dependability of a node. Enterprises running their own Chainlink Node can use staking-backed SLAs to bootstrap the dependability and security of their data and off-chain services, forcing them to have real economic stakes and repute on the line for failing to meet their stated requirements. This allows enterprises and data providers to provide deterministic guarantees to automatize processes like smart contracts without rebuilding their integral backend systems .
A supply chain starts from the source of materials and ends with delivering goods to the conclusion customer. Along the route there are payments transferred, changes in ownership, customs clearances, regulative oversights, and documents shared between parties. Smart contracts offer a means to automate these processes as a means of reducing friction and counterparty risks in ball-shaped deal. Chainlink oracles can connect supply chain smart contracts to web APIs, cloud networks, and respective real-world sensors, such as GPS, temperature, speed, acceleration, humidity, luminosity, and more. This data can be used to trigger payments and transfers of data between parties in a manner that can ’ thymine be manipulated by any single party in the supply chain. Such a framework generates a fortunate informant of accuracy for all byzantine parties with substantially less disk overhead .
issue chains are increasingly making use of RFID ( radio frequency identification ) technology to track goods. RFID systems connect armory items with tags that can be detected at distance via a radio frequency. This allows for simplified and highly efficient track of memory trade, shipping pallets, and many other common inventory methods. With Chainlink oracles, RFID datum from the very populace can be used to trigger a broad image of on-chain contracts, including the initiation of requital upon reception of stock at a warehouse, or autonomous insurance payouts for check shipments .
The Open Library Project, a project created during the Chainlink Virtual Hackathon 2020, used Chainlink oracles to build an RFID blockchain consolidation that enables users to check RFID-tagged books in and out and record this activity on-chain, creating a decentralized and borderless book rental chopine .
IoT sensors can be used to ensure that products in passage are by rights maintained throughout the provide chain travel. Examples include keeping food at sealed temperatures and sealing containers against tampering. Chainlink can be used to create blockchain IoT integrations by connecting IoT sensors to smart contracts that trigger payouts and issue fines depending on whether or not the IoT data confirms timbre control standards were adhered to as defined in the predefined purchase order .
An case of this is PingNET, a decentralized transmission network for IoT devices that uses Chainlink to enable automated payments between stakeholders based on data from IoT-enabled pallets on PingNET. PingNet besides aims to bring other IoT consequence data on-chain like Humidity, Altitude, UV index, Radiation, and more .
When cargo is shipped across borders to countries with vary regulations, most often it requires clearance from the receiving nation ’ sulfur customs agency to prevent the cargo of illegal or dangerous goods. many craft finance contracts will require access to this datum to determine the condition of a dispatch in real-time. As fresh contracts begin to automate such agreements, they will still require information regarding customs headroom. Chainlink oracles can directly provide this data in a privacy-preserving manner, allowing for throughout automation of a cross-border trade finance contract .
Bill of Lading, Invoice, and Policy of Insurance
International trade paperwork largely consists of three main documents : a Bill of Lading, issued by a carrier to acknowledge receipt of cargo for cargo ; an Invoice, issued by a seller to a buyer regarding the details of a sales transaction ; and a policy of Insurance—a contract between the insurance company and the policyholder stating the claims the insurance company is legally required to pay. Each of these documents can benefit from oracles ; it would be possible to use oracles to generate a Bill of Lading directly from data, provide foreign exchange rates to Payment Invoices, and provide IoT choice manipulate data to an on-chain policy of Insurance compress to trigger colony .
Utilities like water, energy, and the Internet are foundational pillars of modern club. The effective operation and management of these utilities is full of life to social and physical health, yet they often rely on ailing incentivized business dynamics and outdated infrastructure. Smart contracts bring modernization to utilities infrastructure by moving them towards average, automated, real-time systems that use decentralized networks, data, and crypto-economic incentives to enforce such conditions. This ensures that utility providers are held to a higher standard and users have better access to objective data showcasing the quality and condition of samara utility services .
Internet, Telecommunications, and Cloud Hosting
many utilities like the Internet, cable television, and cloud hosting charge customers based on specify price structures. however, when their services go down, sometimes causing large fiscal losses ascribable to opportunity costs ( e.g. exchanges experiencing downtime due to a overcast outage ), no one is held accountable. IoT sensors can monitor the uptime of utilities and Chainlink can feed their performance data into a bright sign to calculate monthly payments or publish reimbursements based on downtime .
ETHNewYork 2019 hackathon submission Blocksolid explored a manipulation subject where NGOs could hold Internet Service Providers ( ISPs ) accountable for faulty internet services in developing regions. They did thus by tracking Internet Service Provider ( ISP ) uptime and using Chainlink oracles to relay this data on-chain. If downtime is detected, the on-chain chic contract holding donated funds is updated to prevent withdrawals from the ISP .
Energy providers are creditworthy for ensuring all the earth ’ s infrastructure receives the energy required to ability the global economy. To increase the efficiency of energy pitch, Chainlink oracles can be used to feed consumption rates into a ache contract to trigger over-consumption penalties, recruit CO2 taxes, and provide current energy prices to fairly generate electricity bills and allow payments in different currencies. fresh contracts can take readings from ache meters to monetize person ’ randomness output, track consumption, and facilitate payouts between the two .
Dipole, a blockchain-based circulate energy trading market, plans to use Chainlink Price Feeds to enable the on-chain trade and valuation of energy assets. Users can then purchase energy resources using decree or cryptocurrency with rally rates determined by Chainlink-powered decentralized price feeds .
While much taken for granted, the infrastructure that ensures your tap at home can provide you with urine is heavily monitored for quality command and dependability. IoT sensors can monitor water tables, chase corporate consumption, and identify illegal siphon of populace bodies. Chainlink can feed data from this IoT data to smart contracts in order to issue regulative fines, beget consumption invoices, trigger autopayments, update issue tracking databases, or even trigger emergency fund to cities at risk of floods .
Emissions and Waste Management
The emissions and waste disposal industries can be transformed by IoT-enabled fresh contracts that can accurately measure output and efficiency. Through Chainlink oracles, this datum can be used to mechanically trigger payments to the proper baffle body for overconsumption, monetize the garbage used in recycling or waste-to-fuel technologies, or generate incentivized payment structures that lower garbage bills when person consumes less or uses more biodegradable items .
Authorization and Identity
While smart contract-enabled blockchain networks are inherently pseudonymous, there is strong necessitate for users to be able to prove their real-life identity as means of ensuring Sybil-resistance and/or granting clearance. Through Chainlink oracles, traditional data infrastructure containing user identities ( such as governmental databases, social media, etc. ) can be connected to smart narrow applications, either by tying a exploiter ’ south identity to their on-chain address or attesting to data in an off-chain waiter. This ensures institutions are able to maintain full regulative submission and provide an extra layer of security via dealing with know identities .
E-signatures have become an increasingly democratic way to obtain signatures on documents. They have modernized the touch process and helped companies avoid the dearly-won overhead of obtaining a hand-written physical signature. With signatures being the most common room to authorize contracts, it ’ s a necessity that Chainlink oracles give smart contracts access to leading e-signature companies like DocuSign .
Chainlink can benefit the e-signature industry in two ways : testify to the e-signature and relaying it on-chain, or providing existing e-signature solutions with access to external data as a think of of making their compress solutions more moral force. FirmaChain, a blockchain-based digital key signature and contracting solution, is using Chainlink oracles to allow its digital contracts to execute according to real-world data and events, like checking the authenticity of a driver ’ randomness license before approving a car rental. Another example is EthSign, an automated narrow settlement framework where users can define off-chain data sources through Chainlink oracles arsenic well as their respective trigger conditions .
Another verifiable way to authorize a smart compress is through biometric data, such as a fingerprint or a retinene center scan. Since biometrics are uniquely identifiable to a specific person, they can be an effective means to verify person ’ south identity american samoa long as there is a reliable database or source to cross-reference it against. Chainlink oracles can both deliver the biometric data to the smart shrink and connect it to different off-chain databases to verify authenticity .
Using trusted hardware and/or advanced cryptography, Chainlink oracles securely handle the private report information of external systems and applications. This enables fresh contracts to directly verify credentials, such as whether person has the proper sum of funds or possesses a specific security system cardinal. once Chainlink oracles relay the confirmation on-chain, the chic contract can trigger execution and settlement of funds. Bringing credentials on-chain can besides be particularly effective for verifying inputs before exchanging valuable assets .
Institutions leveraging blockchain and smart narrow engineering often require extra infrastructure to ensure full regulative submission in regards to Know Your Customer ( KYC ) and Anti-Money Laundering ( AML ) laws. This requires the habit of an external oracle to provide the datum regarding the identity and wax history of funds being transferred .
Coinfirm is one model of a blockchain analytics tauten that is using Chainlink oracles to bring data from its Anti-Money Laundering ( AML ) solution on-chain. This provides a plug-and-play solution for users wanting to add submission to any on-chain application through real-time verification by an prophet network. additionally, CipherTrace launched DeFi conformity oracle service on Chainlink to enable DEXs and other DeFi applications to abide by Office of Foreign Assets Control ( OFAC ) sanctions requirements by providing source-signed complaisance data on-chain .
Social Media Identity and Domain Names
Blockchains however have a steep eruditeness curve for many people, particularly around dealing with long hexadecimal addresses. In order to improve exploiter experience, oracles are being used to help transform hexadecimal addresses into human-readable names like “ chad.crypto ” .
One case is unstoppable Domains, an on-chain world name repository using Chainlink oracles to tie a exploiter ’ s Twitter social media account to their human-readable on-chain address in a verifiable and guileless manner. This allows anyone to verify that a blockchain world is tied to a user ’ s social media report before sending them funds .
Smart Contract Audit Results
To ensure the integrity and proper functioning of smart contract applications, developers may want to verify whether or not a protocol has undergo one or multiple security audits before sending it funds. Using an oracle, users can get on-demand verification of audit results directly on-chain, opening up practice cases like automatic pistol checks before certain transactions, such as high-value ones, or when acting as a hope custodian for other users funds .
Cybersecurity firm Hacken will use Chainlink oracles to bring their security system data on-chain regarding bright condense audits, penetration tests on centralize exchanges, tease bounties, and more. This datum can then be utilized by smart contracts to prevent interactions with dangerous and/or unaudited smart contracts .
Two-factor authentication ( 2FA ) is another method acting a exploiter can leverage to secure their on-line accounts, requiring an extra layer of verification beyond a username and password. This increase of security prevents unauthorized access to confidential information, arsenic well as preventing the transfer of funds without multiple verifications. With Chainlink oracles, chic contracts are able to be enhanced with 2FA functionalities, immediately protecting a drug user ’ south cryptocurrency holdings .
Digital Bridge is an case of a plan using Chainlink oracles to bring 2FA security to smart contracts on the Matic Network. By connecting to a high-availability 2FA API authentication service, Chainlink enables users to create a defense-in-depth strategy for their on-chain funds, preventing unauthorized transfers tied in the event that their private key is stolen .
All types of cerebral property, from royalties like copyrights and trademarks to license fees for patents, can be turned into ache contracts. Chainlink can be used to check IP databases for ownership verification, verify off-chain credentials before IP access, and facilitate payments from the drug user to the IP owner. Smart contracts could even tokenize fond ownership of IP and divvy out payments according to a person ’ randomness share share. large enterprises such as Microsoft and EY have shown this to be a practical solution that significantly reduces operational inefficiencies in the rights and royalties management serve .
Open-source technology is growing in popularity, and can benefit from more expansive bounty programs to incentivize contributions. however, confirmation of a contributor ’ randomness cultivate and payments to them are much manual processes, raising costs and delaying payout timelines. Chainlink oracles can be used to track contributions on populace code repositories such as Github and unlock a payment escrow once predefined test cases for a bounty have passed without errors .
While society may not agree on assorted issues, an enterprise most people can get behind is creating more transparency, accountability, and efficiency in politics institutions. Blockchains provide club with new infrastructure for tracking and executing government processes, smart contracts offer tamperproof guardrails on how governments are allowed to take action, and oracles allow for the function of objective data to trigger the execution of those actions as opposed to always leaving it up to centralized interpretation. Oracles are one of the most crucial ingredients to realizing the prize of smart contracts within government processes, as they both provide a bridge to connect bequest infrastructure to blockchains and serve as the final triggers for executing the sign .
Enterprise use of smart contracts will require new forms of automated regulative submission. While some restrictions can be hardcoded into the ache sign ’ s programmatic code, governments can besides make use of oracles as a way of extracting metadata from the ache sign or requiring external approval from a government-run oracle before broadcasting a transaction .
An example of a Compliance Oracle was outlined in the Project Whitney Case Study initiated by the Depository and Trust Clearing Corporation ( DTCC ), the post-trade fiscal services caller that settles the huge majority of securities transactions in the United States. As stated in the case study, a submission oracle is a “ Dynamic rules engine that enables issuers and investors to maintain complaisance throughout a securities lifecycle by approving/rejecting transactions. When a transaction is approved, the banal record is updated, and the movement of tokens on-chain occurs. ”
Given the holocene polarization around election results, there is increasing need for plug, tamper-proof vote solutions that establish integrity in the election procedure. While it may take time to overhaul government voting systems, one can envision a simplified scenario where a vote can be cast on-chain using a secret key, an oracle can verify the ID of the person from multiple approve sources in a privacy-preserving manner via DECO, and, if they match, then a confirmation is published on-chain where it is stored as an immutable read that can be cryptographically verified by anyone. This leads to the initiation of a more sustainable democracy through tamper-proof vote, aligning with the United Nations ’ sustainable development goals .
smart contracts can be used to bring more efficiency and integrity to the issue of government certificates, permits, and deeds. Oracles can be used to generate certificates more autonomously, such as through using DECO to verify a person ’ sulfur credentials before sending them a tokenized document such as a license. Using a system like DECO allows the smart shrink to query a fixed of authoritative sources in a privacy-preserving manner. Such an automatize process could save billions of dollars in politics spending .
hybrid smart contracts that combine on-chain code and real-world data from IoT sensors and satellite data can be leveraged to create amply traceable, guileless, and automated incentivization systems that directly reward individuals, companies, and governments for taking depart in sustainable practices and fighting against both climate switch and mitigating its harmful effects. This can include the universe of tokenized carbon paper offsets, regenerative department of agriculture, and even the monitoring of pulmonary tuberculosis to reward those who stay within their means .
The green World Campaign is an example of one project that aims to use loanblend bright contracts to incentivize regenerative farming in a reforestation program created in collaboration with IC3 and funded by a Chainlink Community Grant. This program uses satellite remote control sensing data that is fed on-chain by Chainlink oracles to reward stewards of regenerative department of agriculture who help reforest debased land. By incentivizing carbon paper drawdown, their plan is to finally plant billions of trees and aid raise the populate and health standards of those in developing regions .
Satellite Imagery and Drones
While slightly more advanced, it ’ s not hard to imagine a future where satellite imagination is used in combination with IoT networks and drones to gather data on external activities like a construction stick out. Through artificial news, the data could then be analyzed and cross-referenced with past projects to determine the completion percentage of a visualize. Chainlink oracles could relay that datum to an on-chain chic contract to issue completion-based payouts to construction companies, solving a major trouble in check cash flows for companies performing large, time-consuming projects .
During a hearth old world chat between Chainlink Labs Chief Scientist Ari Juels and Chainlink Co-founder Sergey Nazarov, Ari discussed his early solve with PhD student Sishan Long on a project called AIRS : automatize Incentives for Reforestation Stewardship. AIRS aims to incentivize stewardship of the environment by systematically taking in satellite data ( carbon paper capture capacity, the ability to sequester carbon, carbon synchronize capability, etc. ) and monitoring its state over time using trust execution environments. The idea is for entities like governments and NGOs to pour money into the smart contract, which then gets dispensed to the people who are creditworthy for maintaining and expanding this very important carbon paper sink, incentivizing sustainable practices .
Verifiable Randomness (VRF)
On-chain applications do not have access to a secure Random Number Generator ( RNG ) due to the deterministic nature of blockchain networks. Using the on-chain blockhash can result in manipulation from blockchain miners/validators who discard blocks with unfavorable hashes and can “ re-roll the die ”, ultimately changing the RNG value. naive off-chain solutions are opaque and provide no proof that the RNG respect produced is legitimate and has not been manipulated by either the data source or oracle node. Chainlink verifiable Random Function ( VRF ) overcomes these issues by providing smart contracts with a procure reference of randomness backed by a cryptanalytic proof that can not be manipulated by oracle nodes, users, or exploitation teams .
Chainlink VRF works by combining blocking data that is still unknown when the request is made with the prophet node ’ s pre-committed secret key to generate both a random numeral and a cryptanalytic proof. Consuming chic contracts will lone accept the random issue remark if it has a valid cryptanalytic proof. This provides users with automatize and publicly verifiable assurances directly on-chain that each smart narrow application using Chainlink VRF for randomness is demonstrably honest. verifiable randomness can be used across a broad of function cases including active NFTs, on-chain gambling applications, off-chain systems, and beyond .
smart contracts are pieces of code that run deterministically on the blockchain. however, they are “ asleep ” by default and must be “ awoken ” by some external entity to perform on-chain functions and change compress states. Chainlink Keepers provide smart sign developers, decentralized applications ( dApps ), and decentralized autonomous organizations ( DAOs ) a solution to this problem through a highly dependable, decentralized, and cost-efficient decentralize network of nodes that can automate any smart condense routine and perform regular abridge alimony .
Chainlink Keepers can be used for a wide range of chic contract functions including executing limit orders on a DEX, minting new tokens when a modesty increases in value, harvesting give from a vault, rebasing elastic add tokens, triggering automated trading strategies, liquidating undercollateralized loans, releasing vesting tokens, topping up token balances falling below a doorway, and much more .
Cross-Chain Interoperability Protocol (CCIP)
It ’ s unlikely that one blockchain will come to dominate the entire chic condense grocery store, particularly when considering throughput limitations, jurisdictional differences, and specialization of chains. Such a multi-blockchain population means that blockchains must cross-communicate with one another. however, due to their implicit in security system properties, blockchains can not natively access data on other blockchain networks, a very exchangeable issue to the oracle problem. Chainlink oracles can be used to bridge this col by reading data on one blockchain and writing the results on another as a mean of triggering some type of cross-chain interactions and/or simply an on-chain transaction on the chain requesting the information .
The Cross-Chain Interoperability Protocol ( CCIP ) is an open-source standard that will provide a batten, decentralized, and expandable cross-chain messaging solution that will enable ache contracts on any blockchain network to send messages, transmit tokens, and initiate actions across any other blockchain network. In addition to generalized message passing between chains, CCIP enables the universe of cross-chain bridges such as the Programmable Token Bridge address execution, allowing for the transfers of tokens along with commands to any other blockchain network .
Fair Sequencing Services (FSS)
While Chainlink oracles are normally recognized for their ability to fetch and deliver data from the real world on-chain in a reliable and secure manner, they can besides perform versatile off-chain computations including the order of transactions. Chainlink ’ s development of Fair Sequencing Services ( FSS ) will allow decentralized applications to mitigate Miner Extractable Value ( MEV ) by ensuring transaction ordering can not be manipulated by miners as a mean of siphoning value from users. additionally, by preventing front-running attacks, natural gas costs can be drastically reduced and DEXs can become more trustworthy ( e.g. trades are honored according to fair rules like their arrival in the mempool ) .
Blockchain Gas Price
In club to prevent spam attacks, transactions on smart contract-enabled blockchains require the accelerator fees in the native token to pay for the cost miners expend to validate a transaction. however, the market that determines gasoline prices happens off-chain and therefore smart contracts require an oracle to fetch the current cost per unit of gas .
An exercise of this in action is Tornado.cash, an on-chain privacy mixer that uses the Chainlink gas monetary value prophet when generating transactions if centralized boast price providers are off-line or inaccessible ( such as being blocked by Tor ). smart contracts can besides use this natural gas price oracle to create flatulence price fiscal products and other fiscal products designed for hedging against blockchain network congestion and senior high school transaction costs .
Fair Participant Selection
With the advent of blockchain-based public sales, many projects are looking for ways to fairly choose the order of sale participants beyond the coarse “ first come, beginning serve ” ’ model, which can be easily manipulated. initially popularized by centralize exchanges, there is an increasing shift towards a randomized-based selection of sale participants within smart contracts .
One example is Centaur, a DeFi platform that uses Chainlink VRF to determine the participants in an on-chain public sale. Based on a list of addresses accumulated before the sale, Chainlink VRF determines in a confirmable and fair manner which addresses from that list are allowed to participate in the on-chain populace sale .
Another exercise is Get Protocol, a blockchain-based event ticketing solution that uses Chainlink VRF to randomly determine a digital wait production line for in-demand concerts and events. This provides users with an equal opportunity to obtain tickets, in a manner they can independently verify on-chain as indifferent .
Random Node Selection
Some protocols use volatility as a shape of security system, for exercise by randomly choosing validators for block production. An insecure generator of randomness would allow malicious actors to excessively insert themselves into the summons and manipulate the output of blocks, possibly tied bringing the network to a arrest. Chainlink VRF can be used as a tamper-proof source of randomness to fairly choose validators each time a block of transactions needs to be produced, protecting blockchain networks from a large class of keystone attack vectors.
Read more: Coin Master – Wikipedia
As a generalize framework for building decentralized prophet networks, Chainlink provides developers the tools they need to connect their smart contract applications to any real-world data or events required for their use character. While the use cases listed above are not an exhaustive number, as there is an space issue of smart sign use cases made possible by Chainlink, we believe they provide a start point for developers who are interested in building new innovative decentralized applications .
If you ’ re a developer and want to promptly get your smart condense application connected to Chainlink oracles, visit the developer documentation and join the technical foul discussion in Discord. If you want to schedule a call to discuss an integration more in-depth, reach out here .
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