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sexta-feira, 31 de julho de 2020

As decentralized finance takes off, LINK shoots toward top of cryptocurrency league tables
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July 31, 2020
Sponsored by
By the CoinDesk Markets Team
Edited by Bradley Keoun
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TODAY:
  • Prices: Bitcoin (BTC) $11,197 (+0.5%) | Ether (ETH) $344 (+1.8%)
  • Chainlink's LINK token soared almost 60% in July as cryptocurrency traders fawned over digital assets from the fast-growing realm of decentralized finance, or DeFi. Now competitors are taking aim at Chainlink's early lead in the crucial role of DeFi "oracles," Daniel Cawrey writes.    
  • What's Hot: The U.K.'s central bank is making sure it can support a digital pound if one is ever launched, and how the Twitter hackers gained access to major accounts.

MARKET MOVES

Chainlink’s LINK tokens have quadrupled in price this year to become one of the biggest success stories this year in cryptocurrency markets.

The project’s market capitalization, now the 12th highest among all digital assets at $2.7 billion according to CoinGecko, reflects investor perceptions of Chainlink as the leading crypto “oracle” provider. That means it supplies prices and data streams to semi-automated lending and trading systems built atop blockchains.

The function is crucial in the fast-growing arena of decentralized finance, or DeFi, which has generated such a speculative fervor in recent months that supposed money-of-the-future bitcoin has almost started to look passé.

But now Chainlink’s early lead as the dominant DeFi oracle is starting to attract competitors, and cryptocurrency investors are wondering if the niche industry might be due for a shakeup. Given the key role played by oracles in DeFi, users of the decentralized systems also stand to benefit.   

Potential rivals could include dedicated oracle upstarts like Tellor as well as leading DeFi projects like MakerDAO that are developing their own solutions. Another data oracle, Band Protocol, launched a new version of its network on the Cosmos blockchain last month, to avoid congestion on the more popular Ethereum network, on which Chainlink runs. Others in the space include Augur and Nest, according to the industry-tracking website DeFi Pulse.

"I think it's good that there are different projects that are offering this, obviously," Niklas Kunkel, head of backend services for MakerDAO, said in a phone interview.


LINK price and volume in 2020. (CryptoCompare)

Chainlink has taken a commanding lead among DeFi oracles, a perch that’s been strengthened with frequent announcements of new partnerships and node operators. Just last week, Deutsche Telekom's IT subsidiary, T-Systems, announced plans to join Chainlink as a node operator. This past Friday, Korean banks IBK Bank, Shinhan Bank, KEB Bank, NH Bank and CenterPrime announced they plan to provide oracle data for Chainlink.

The project even has galvanized a community around it, and its most ardent supporters are known as Chainlink Marines on social media.

DeFi applications are built using “smart contracts” – strings of computer programming that are embedded into blockchain networks and designed to automate specific functions like lending or cryptocurrency swaps, based on incoming data inputs. There’s no human middlemen as in the case of centralized banks and Wall Street trading firms to monitor pricing, so the smart contracts rely on distributed input sources, known as oracles.

Under Chainlink’s protocol, data is aggregated from third parties and then batched into oracle feeds that are streamed out to DeFi systems. Various information providers, mostly from the cryptocurrency ecosystem, provide the data as “node operators” and are rewarded with payments in LINK. Many of Chainlink’s oracles have over a dozen participants. 

Chainlink’s most popular product is pricing for cryptocurrencies like bitcoin; the platform lists 36 trading pairs on its website. 

“If you don't have data on-chain, you can't build a contract for a certain market,” Sergey Nazarov, co-founder of Chainlink, told First Mover in a phone interview. “We don't make contracts. We don't secure blocks. We don't secure transactions. We just feed data into various systems.” 


The BTC/USD price oracle. (Chainlink)

But in the fast-moving DeFi industry, where anything resembling an establishment could be years or even decades in the making, few competitors are ready to concede. 

MakerDAO, the decentralized-lending project behind the dollar-linked stablecoin dai, has provided its own distributed oracles since 2017 and now lists seven price feeds on its website.

DeFi projects including 0x, Gnosis and Kyber Network are using MakerDAO’s oracle feeds as well as contributing to them as third-party data sources, according to Kunkel. Node operators in MakerDAO oracles are chosen and paid in the project's cryptocurrency, dai. 

“When we started building dai, there weren't any existing oracles that we could utilize,” Niklas Kunkel, head of backend services for MakerDAO, told First Mover in a phone interview. 

A newer entrant is Tellor, which uses a complex algorithm, based on the SHA-256 hash function that’s used in bitcoin mining, to assure the integrity of its data.  

“Miners compete for the right to submit the data,” Tellor CEO Michael Zemrose said in a Telegram chat. 

The rewards for providing data are paid out in Tellor’s native token, TRB. Its price has nearly quadrupled this year, but off of a smaller base: The token’s market capitalization stands at just $16 million according to CoinGecko, a tiny fraction of LINK’s. 

At this point, the DeFi oracle market is Chainlink’s to lose. 

– Daniel Cawrey, Senior Markets Reporter
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Learn More

TWEET OF THE DAY


Inside the Hype Machine: Behind the Scenes of the ICO Boom

Friday, July 31, 4 p.m. ET

Speakers: David Wachsman, Brad Laurie, Hartej Sawhney, Christie Harkin

Smart-contract auditors, PR pros, YouTube influencers: Meet the service class that was caught up in 2017’s ICO gold rush, selling metaphorical shovels to prospectors seeking billions in instant riches. We relive the good, the bad and the ugly of that era through their eyes.

Watch today's CoinDesk Live session at 4 p.m. ET and sign up for the Ethereum at Five limited-run newsletter, published every morning until July 31.

BITCOIN WATCH

BTC: Price: $11,197 (BPI) | 24-Hr High: $11,214 | 24-Hr Low: $10,847

Trend: Bitcoin has been failing to maintain momentum since a quick rush of volatility and a price surge to multi-month highs above $11,300 on Monday.

Since then, however, the price action has been largely centered around $11,000, with both lower highs and higher lows setting up a contracting triangle on the hourly chart. Such a pattern atop a prior bullish run ($9,000 to $11,300) is known as a bull pennant. 

Chart analysts consider a bull pennant as a continuation pattern – one that recharges the bulls’ engines for an extension of the preceding rally. As such, we may see a bullish breakout and a rally toward the resistance at $12,000. A move above the upper end of the pennant, currently at $11,317, is needed to confirm the breakout. 

That said, the possibility of the breakout failing to accelerate the uptrend cannot be ruled out, as the 14-day relative strength index is reporting overbought conditions with an above-70 print. In addition, Thursday’s doji candle is signaling buyer exhaustion. 

If prices drop below the pennant support, currently at $10,920, a deeper decline toward the former hurdle-turned-support at $10,500 (February 2018 high) may be seen. 

At press time, though bitcoin had risen to near $11,200, representing a 0.66% gain on the day.
– Omkar Godbole, Markets Reporter
 

WHAT'S HOT?

Twitter Says ‘Phone Spear Phishing’ Let Hackers Gain Employee Credentials (CoinDesk)
Twitter revealed that a number of employees fell victim to a “phone spear phishing attack” in a new update on how major accounts were compromised.

Bank of England Building Payments Network to Support a Potential Digital Pound (CoinDesk)
The U.K. central bank’s upcoming settlement service is being built to support a possible central bank digital currency (CBDC).

Police Arrest 27 Alleged Masterminds Behind $5.7B Plus Token Crypto Scam (CoinDesk)
Chinese police have arrested all 27 primary suspects thought to be responsible for running the massive Plus Token Ponzi scheme. 

As The Bitcoin Price Soars, Bitcoin’s ‘Real’ Crypto Market Dominance Is Revealed (Forbes)
According to a new measure of bitcoin dominance, bitcoin's total share of value in the market stands at 79% not 63% as cited at CoinMarketCap and Messari, Forbes says.
– Sebastian Sinclair, Reporter
 
Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.
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Donations

BTC: bc1qxv3stg0xha9upurf7h4aqnmg3xjn3h0zk28kpe

ETH: 0x01870296774Fb0A2DbF9b44d2E6a57fb8Ccea070

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DOGE: DCpu9v1bkTXj8VKUDG97LHdV2qipDPyZsR

ADA: addr1qx4q7348dv2ju5zshee9ru23ssmqhyyjlnxe0xlezjq5we42par2w6c49eg9p0nj28c4rppkpwgf9lxdj7dlj9ypganqtmuu2p