Chainlink has also been adopted as part of the yearn.finance protocol in v2 LINK yVault, otherwise known as yvLINK ¹¹. Within this vault, yearn.finance can supply LINK to Vesper Finance LINK Pool to earn VSP(Vesper LINK), resulting in rewards that can be harvested and then sold with these rewards for additional LINK that will be deposited within the vault. Another development is lending LINK on AAVE, gaining interest and then staking the accumulated AAVE after as a reward (AaveLenderLINKBorrowerSUSD). Lastly, yearn.finance utilitizes LINK by locking it at MakerDAO via the LINK-A minting DAI, which then uses the minted DAI as a deposit on v2 DAI yVault earning yield (StrategyMakerLINKDAIDelegate).

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Chainlink also offers lending and borrowing applications. These applications provide price feeds that can compute collateral values, commitment to loans and liquidate features according to the market prices. Notable protocols utilizing Chainlink are: Aave’s borrowing and lending of a multitude of on-chain tokens; CREAM’s on-chain money market on Ethereum; and Sushiswap Kashi’s lending and margin trading solution, which was created on the BentoBox smart contract.

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Chainlink authorizes derivative markets and synthetic assets by providing the current asset price at the time of the settlement or trade. Protocols that use this capability include: Synthetix; which is one of the largest derivatives protocols; Opium Exchange, where Chainlink can empower options, credit default swaps, and futures; and MCDEX, as Chainlink can provide current pricing for automated market makers and order books.

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Chainlink can also provide feeds for prices used to settle trades, determine the price associated with a selected liquidity mining collateral, create market strategies and provide a secure off-chain computation of collateralized value. A notable protocol that empowers its services through Chainlink providing spot trading and perpetual contracts is dYdX. Another notable protocol is Curve, which Chainlink authorizes through its automated market-making features and low slippage between pegged assets.

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Insurance is another area where Chainlink eases the process of providing parametric insurance applications and supporting the protocol’s policy, incorrect rebalancing or payouts for insured funds. Arbol is one protocol that Chainlink facilitates using parametric crop insurance for farmers derived from weather conditions. Etherisc is another protocol which uses Chainlink to facilitate solutions to real-world flight delays through insurance payouts and settlements.

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Chainlink utilizes pegging assets to empower protocols by assessing off-chain reserves that can balance on-chain token use. If needed, it triggers a rebalancing with lost pegs. Paxos, a real financial world brokerage, provides real-world assets facilitated by Chainlink. Another example is TrustToken, which is a blockchain stable coin supported off-chain by reserves in USD.

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Real estate company RealT has adopted Chainlink to provide it with current data regarding the value of an asset. Chainlink presents them off-chain with a valuation represented on-chain. In particular, Chainlink facilitates tokenized real estate for RealT and authorizes users to buy parts of a property’s inherent cash flow.

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Outside of delivering data, Chainlink can also trigger on-chain events off-chain based on previously specified conditions. B-protocol is one notable example. It uses Chainlink to empower liquidation, making lending more trustworthy through increasing protocol security. Another example is Keep3r, which may be used to automate on-chain transactions such as liquidations that occur off-chain.

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Finally, one of the more famous examples is the NFT craze’s use of Chainlink for on-Chain collectibles. Chainlink’s VRF, as mentioned above, provides a proven, fair source of randomness which is used to generate random NFT traits and issue a reward to a user. Etherlegends, Aavegotchi and Axieinfinity are three protocols that authorize Chainlink to facilitate tasks. These tasks include: collectibles backed by interest generating tokens; PvP and PvE trading card games; and Pokemon inspired universes where VRF can be used to battle Axies. Additionally, on-chain gaming is another area that utilizes Chainlink’s VRF to generate random in-game scenarios and immutable prizes. Blocklords, Planetarium, War Riders and Evolution land are notable examples of Blockchain/cross-chain game applications ¹².

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Chainlink — Grants and Research

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Chainlink has deployed grant programs to collect fundamental resources for the generation of developer tools, high-quality data and to launch services in or around the Chainlink Network ¹³. Listed on the website are five categories of grants that are available: community grants, integration grants, bug bounty programs, research program grants, and social impact grants.

The community grants empower developers to build tools and infrastructure for the Chainlink network. The purpose is to accelerate smart contracts and secure node infrastructure. ChainSafe is an example that received a community grant for the Ethereum JavaScript Library to expand to include web3.js. Another important example is LinkMarine, which received a grant to build a Chainlink News Website, one of the first of its kind ¹⁴.

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Integration grants support teams, projects, and protocols globally to become part of Chainlink’s ecosystem by providing services and technology from Chainlink. Notable recipients of integration grants include SmartPy, who received an integration grant for Chainlink Price feeds of Tezos. Blockspaces and LinkUp Florida received a grant to integrate Chainlink on Near Main net and Blockchain integration with Solana and Avalanche.

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The bug bounty programs encourage engineers specializing in security and developers to examine Chainlink’s core code. This grant encourages the creation of greater stability by incentivizing protocols to search for current and potential attack vectors.

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The research grants support academics and researchers to undertake cutting-edge research into Chainlink, propelling the network as a whole forward.

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Social impact grants support NFP’s and organizations to research the utilization of smart contracts and data on-chain for the betterment of humanity and innovative emerging markets.

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Chainlink 2.0 — What’s new:

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In April 2021 Chainlink Labs released a white paper ¹⁵ outlining new abilities and potential future uses for the network. These included scalable off-chain computation, explicit staking and privacy-preserving features contributing towards Chainlink Lab’s long-term vision of becoming a Decentralized Meta layer ¹⁶. The white paper outlined 7 core functionalities: hybrid smart contracts, abstracting away complexity, scaling, confidentiality, order-fairness, trust minimization, and incentive-based crypto-economic security.