The decentralized oracle project Chainlink was one of the big winners in the 2019 cryptoeconomy, particularly on the fronts of adoption, partnerships, and price action.
The rise is not necessarily surprising: Oracles are tough to build and highly in demand, and Chainlink is one of the earliest efforts to make interesting headway in the arena.
One of the largest milestones yet in the project’s young history came last year when Chainlink went live with its mainnet activation. With that rollout, attention around the middleware oracle system and its associated crypto, LINK, have surged around the space.
Indeed, the newfound scrutiny led to the Chainlink team locking down a slew of new partnerships in 2019, including with the likes of Celer, Harmony, Hedera Hashgraph, Matic, Ocean Protocol, Synthetix, Zilliqa, and more. The year also saw LINK listed on influential exchanges like Coinbase and Binance.US.
Major enterprises took note of the project last year as well. The Google Cloud team devised a way to create “hybrid blockchain/cloud apps” using the Ethereum + Chainlink stack. The startup arm of software giant Oracle partnered up with Chainlink to help startups sell their data. And Thomson Reuters began work on a proof of concept (PoC) that would meld the firm’s Contract Express service with smart contract tech using Chainlink.
If such embraces weren’t interesting enough, key Chainlink researchers advanced a new privacy technique in 2019 dubbed “Mixicles,” which uses oracles to bring privacy to smart contracts.
With no shortage of Chainlink action then, the LINK price went for an upward run on the year, having risen 500 percent from $0.29 USD to $1.80 between January 1st, 2019, and January 1st, 2020. The buzz around the crypto also helped to push LINK to a new all-time high of $4.36, which was achieved briefly last summer.
But that was last year, and a new year is upon us. Will 2020 be another ripper of a year for Chainlink and its crypto, or will the next 12 months prove steady for the project on the heels of it advancing so far so fast?
These questions are on the minds of many Chainlink stakeholders, and opinions are abounding accordingly. Let’s survey some notable predictions on where the project could be heading in the short-term to get a better feel for what its horizon might look like.
Ryan Selkis is a crypto commentator and a co-founder of the Messari crypto research hub. Following up on a tradition started in 2019, Selkis recently published his second new year ecosystem write-up, “Crypto Theses for 2020.”
In one section, Selkis predicted that treasury “dumpenings” — or major project-backed selling pressure — was in store for token projects that had big 2017 ICOs but still hadn’t gone public.
In making that estimation, Selkis brought up the already public Chainlink as among examples of token projects that had large treasury war chests that could be sold off relatively fast. His suggestion? At least live projects with live users would be more resistant to such selloffs compared to their still-unlaunched token counterparts. As Selkis put it:
“I said [last year] we’d see most tokens grind down 99%+ from their all time highs, mostly due to the incredible amount of selling pressure that would hit most token markets once teams and inside investors began liquidating positions. By this metric, XRP has a could-be-market-dumped liquid treasury of $2-3 billion, XLM has a could-be-market-dumped liquid treasury of $800 million, and Chainlink has a could-be-market-dumped liquid treasury of $600 million. Those are some of the publicly traded assets. For token projects that raised gobs of money at nosebleed valuations in 2017, things could get very ugly, very quickly once they start trading.”
Of course, Selkis didn’t make a hard Chainlink prediction in that passage. Yet as a related aside, the reference does bring to mind rumblings that the Chainlink team reportedly sold off 14 lots of 700,000 LINK last summer.
That is to say, its builders have seemingly dipped into the treasury before and will do so in the future as they see fit. As Selkis hinted at, at least the Chainlink project is positioned to reasonably weather that kind of acute sell pressure. In the very least then, it’s worth keeping in mind that if the LINK price performs well in 2020 like it did last year, the project’s treasury may be dipped into anew.
Selkis did have more specific comments for Chainlink in his “Theses,” too. He later noted that he could envision oracle competition heating up and Chainlink accordingly losing ground to others, suggesting it’s in the realm of possibility the project gets steadily edged out going forward:
“I’m baffled by Chainlink. Is it the solution to the evasive Oracle Problem? Or is it an overhyped project … Tech giants Oracle and Google recently announced plans to use Chainlink’s network for data sharing purposes … But I still don’t understand the economics of the token itself? And I definitely don’t understand them at $1.3 billion in network value. Outside of Chainlink, various DeFi protocols – MakerDAO, Compound, and UMA among them – also introduced new oracle designs in 2019 to remove the layer of trust associated with their price feeds.”
Tanya Abrosimova is a crypto analyst at forex trade publication FXStreet. On January 8th, 2020, the chartist estimated that a sustained move over a LINK price of $2.3 could pave the way for an eventual run up to $3.
At press time one week later, LINK was in fact trading just above that $2.3 mark. Could that run really be lining up, then? As Abrosimova had explained days prior:
“[O]verall bullish sentiments on the cryptocurrency market helped the coin to smash an important resistance at $2.0 reinforced by SMA50 (Simple Moving Average) daily. Once this breakthrough was confirmed, the upside momentum started gaining traction. At the time of writing, LINK/USD is testing SMA100 daily at $2.3. We will need to see a sustainable move above this handle for the upside to gain traction with the next focus on psychological $2.5 and $3.0.”
Timo Harings: ~$4 + Barclays Speculation
Timo Harings is a Chainlink community pundit who’s decidedly bullish on LINK.
In early December 2019, Harings tweeted out a chart projection that put LINK as heading into the new year between the $3 and $4, saying at the time that “Here is where smart money accumulates.”
The despair is bad within the #Chainlink community rn. It's shaking off a lot of the dumb money that got on board since Google and Coinbase news. RSI is at a hard low right now, price is still extremely high since the start of the run. Here is where smart money accumulates more. pic.twitter.com/tAv1vPQiYE
— Timo Harings (@DLTPandu) December 2, 2019
That price range didn’t pan out by January 1st, but only a few days after later a new wave of acute buy pressure throughout the cryptoeconomy and around LINK has put $3 in the direct sights of traders.
With that said, Harings is presumably just as bullish as he was in December and would accordingly think $4 absolutely remains in play in the near future.
Beyond price, Harings published a January 15th op-ed wherein he speculated that signs were pointing toward a collaboration between banking giant Barclays and Chainlink. That may never pan out, but if it does, an acute boon for LINK would be far from surprising.
The machines are bullish on LINK. Well, WalletInvestor’s machines are. The crypto prediction site, which uses Machine Learning (ML) techniques to forecast crypto prices, is hot on Chainlink at the moment.
At the time of this article’s writing, WalletInvestor projected that LINK would rise to $4.35 in one year’s time and to just shy of $13 in five years’ time.
Of course, WalletInvestor can’t account for all sorts of developments that will occur in the months ahead, so take these predictions with a grain of salt.
One thing commonly discussed in the Chainlink community is LINK potentially becoming a top 10 crypto per market cap. There’s no indication it’ll happen in 2020, but might things look if it did?
At the time of this article’s writing, the market cap of LINK was right at $850 million, a position which makes the crypto the 19th largest in the cryptoeconomy presently.
For LINK to crack decisively into the top 10 biggest coins at the moment, its market cap would need to double to near $2 billion. If that happened, the LINK price would appreciate around 135 percent. Alas, with LINK’s current price at $2.43, that means such a climb could put the token’s price just short of the $6 mark.
Alternatively, for LINK to become a top 5 coin right now, its market cap would have to climb to near the $6 billion mark. That hypothetical rise could put LINK above $10 a pop.
That’s all speculative napkin math, of course, but both scenarios are in the ballpark of what some bullish LINK investors are eyeing.
Much more would have to happen for LINK to mount such ascensions, but if the project becomes increasingly reputable, such rising is in the realm of possibility.
CryptoSponge: It’s Really About 2021
Pseudonymous Chainlink analyst CryptoSponge put together one of the best and most comprehensive 2019 review posts on the oracle project that we’ve come across.
At the end of that review, the author concluded with an eye to the long-term that they were excited for 2020 but thought the real prize for Chainlink would be in positioning itself for 2021 and beyond:
“As a Chainlink supporter, it’s hard to not be excited about 2020. The team is firing on all cylinders, and it’s become increasingly obvious that they are planning many quarters ahead – seemingly always timing their moves to dovetail with the development of the wider market. As promising as 2020 appears, I’ll be striving to mirror Chainlink’s mindset of thinking beyond twelve months. Reaching the next milestone is exciting, but positioning yourself ideally for 2021 and beyond will be the ultimate reward.”
LINK $1,000 incoming? The meme is strong with this one.
For most, it’s a bullish joke made in good fun. For those very few out there who think $1,000 LINK isn’t out of the question in the foreseeable future, don’t get your hopes up. Hitting 1/100th of that mark is considerably more realistic in the near future and would still be quite impressive and bullish.
Sure, let’s circle back on the joke if Chainlink starts revving up toward helping to secure trillions of dollars daily like the SWIFT payments system currently does now, but that would-be bar is astronomically far away at present.
And that’s fine, too. Rome wasn’t built in a day. For Chainlink to achieve mainstream adoption, its builders and community must be diligent in the here in now.
Conclusion: All Eyes on Staking, DeFi, and More Mainstream Partnerships
As Chainlink continues to mature, the biggest thing on many of its stakeholders’ minds is the imminent launch of staking, which will allow LINK holders to stake their tokens to earn more LINK in exchange for helping the network.
- While the details of when staking will be activated are still fuzzy, staking pools like LinkPool are already cropping up to service the community. Look for more pool efforts to proliferate going forward.
- Another point of interest that Chainlink watchers are looking out for is more DeFi embraces, like the Synthetix partnership in 2019.
- For example, in early January 2020 the DeFi oncomers and “flash loan” innovators behind the Aave protocol announced they had partnered with Chainlink for powering the Aave oracle network.
- Like other Ethereum-based efforts that have taken similar leaps, the Aave team said it would have been difficult and out of the way from their project vision to build an in-house oracle solution; thus after deliberation, Chainlink was chosen as an ideal fit.
Look for more DeFi projects to follow the same kind of logic going forward, i.e. wanting to rely on Chainlink rather than building out their own oracle tech.
Another wrinkle of interest on the minds of many Chainlink proponents is the prospects of further major adoption developments.
Maybe Barclays, maybe not. But it wouldn’t be surprising to see another big name jump on the Chainlink train after the developments we saw in last year. Perhaps Microsoft is a low-hanging fruit in that regard, but we’ll all just have to wait and see.
William M. Peaster is a professional writer and editor who specializes in the Bitcoin, Ethereum, and Dai beats in the cryptoeconomy. Has appeared in Blockonomi, Binance Academy, Bitsonline, and more. Enjoys tracking smart contracts, DAOs, dApps, and the Lightning Network. Learning Solidity.
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