Chainlink (LINK) has established itself as a major player in the decentralized finance (DeFi) sphere in the cryptocurrency market. In fact, the decentralized oracle has partnered with major blockchain players and, in late 2022, provided its token holders with the ability to earn passive income through staking.
Apparently, there is a high likelihood that Chainlink will cross the borders of DeFi in 2023, venturing into the non-fungible token (NFT) market. Recall that Chainlink is a decentralized blockchain oracle network built on Ethereum, used to facilitate the transfer of tamper-proof data from off-chain sources to on-chain smart contracts.
Why is the Chainlink network interested in NFTs and dNFTs?
As we know, NFTs are a unique and immutable way of representing digital assets on a blockchain and are used to denote a single digital content. Despite the cryptographic winter of 2022, the NFT market has seen a noteworthy trend in the form of funding non-fungible tokens.
This method allows NFT owners to use their tokens as securities to obtain cryptocurrency loans. In case the borrower fails to repay the loan, the lender has the option of selling the NFT as collateral.
Between January and November last year, NFT-based loans increased tenfold, largely due to the proliferation of DeFi services. However, this growth has been limited to lending protocols. With its entry into the NFT world, Chainlink aims to bring something new to the industry.
Indeed, it is crucial to note that Chainlink is particularly interested in dynamic non-fungible tokens (dNFTs), which change or evolve over time based on specific conditions or real-world actions. These also offer content creators the ability to create unique and mutable objects.
In any case, Chainlink believes that dNFTs could be the next evolution of tokens. In a recent tweet, the team behind the leading decentralized oracle referred to the Internet in 1997, when web pages were static, and how they have since become dynamic.
dNFT: Chainlink is critical to their future development
In the blockchain industry, most of the NFTs available today are static, such as the images found on platforms like OpenSea, which offer limited wear and tear in decentralized applications. In contrast, dNFTs can be deployed in various blockchain modes and can still be used for tokenized real-world resources that require technology that can update as metadata changes.
Chainlink therefore could become a key protocol for the success of dNFTs, as its decentralized Oracle technology facilitates the connection between off-chain and on-chain data. This was demonstrated using the LINK technology of LaMelo Ball and other professional athletes to create dNFTs last year.
Undoubtedly, Chainlink’s foray into dynamic NFTs further solidifies its leading position in the rapidly growing Web3 market. It also expands the company’s resources and makes membership more accessible to new investors and users of decentralized technologies, thus expanding Chainlink’s user base.
New milestone for Chainlink: $7 trillion in “transaction value enabled” (TVE)
In a recent tweet, Chainlink celebrated a new milestone. In fact, the Chainlink network has surpassed $7 trillion in “transaction value enabled” (TVE), a measure of the aggregate USD value of on-chain transactions facilitated by Chainlink oracles on twelve different blockchains as of 2022.
“The Chainlink network has surpassed $7 trillion in transaction value enabled (TVE), a measure of the aggregate USD value of on-chain transactions facilitated by Chainlink oracles on 12 different blockchains since the beginning of 2022.”
⬡ Network Milestone ⬡
The #Chainlink Network has surpassed $7 trillion in transaction value enabled (TVE)—a measure of aggregate USD value of on-chain transactions facilitated by Chainlink oracles across 12 blockchains since the start of 2022. pic.twitter.com/Gzw5C3x2ew
— Chainlink (@chainlink) January 25, 2023
TVE is an advanced flow metric that provides information about Chainlink’s role as a key Web3 infrastructure. It refers to the sum of the USD value of all transactions enabled by a protocol.
Now that more than 1,000 Oracle networks have been launched and natively support more than a dozen major blockchains, Chainlink appears to be on the growth path. According to recent data, there are more than 1,600 projects in the Chainlink ecosystem that have integrated Oracle Chainlink services, including DeFi, NFT, gaming and insurance.
As reported earlier, Chainlink’s social volume has skyrocketed to an all-time high, according to on-chain analytics firm Santiment, after it published a tweet about its proof-of-stock benefits.
After the collapse of FTX, several users in the cryptocurrency industry began requesting proof of reserves from exchanges. To increase transparency on the underlying reserves of on-chain assets, stablecoin-wrapped tokens and blockchain bridges used Chainlink’s reserve proof.
In addition, in 2023, Chainlink says it is looking to expand its monetization model by building an enhanced payment method through Chainlink services.
In this enhanced model, payments could be made in LINK or, in some cases, other assets, including native tokens, at a higher rate than LINK payments. Payments into other assets can then be converted into LINK, leading to an increase in the utility of the same.