Should I buy it or Should I not? Crypto investors ask themselves this question every day about multiple projects. We ask the question ourselves here at Altcoin Buzz too.
In our Master Portfolio, our AB Alpha portfolio, and personally. Today, a simple look at the pros and cons to ask us if we should buy. And what’s the coin of the day? Chainlink. Let’s see what’s new and if we should be buyers here or not.
What We Like About Chainlink
When it comes to Chainlink there are a lot of things we like. We just covered some on our website too. And for some of us at Altcoin Buzz, I know they are saying, finally you are noticing this great project. But let’s see why we like them.
- Infrastructure
First, we love the sector they are in. Web3 Infrastructure. Any smart contract platform that has to deal with off-chain information like crypto prices needs oracles. And Chainlink is the undisputed leader in oracles.
- Automation 2.0
With Chainlink’s Automation 2.0, developers can automate smart contract functions in a decentralized way.
Automation 2.0 Is Live
Offload compute at as low as 1/10th of the cost without compromising on security, and connect dApps using log triggers—equivalent to the pub/sub messaging bus used to connect microservices in Web2.
Access the next-gen features: https://t.co/75Rl6bBcJ6
— Chainlink (@chainlink) October 3, 2023
So it’s not like in Web2 where we rely on Zapier or Webhooks to make our automations go. This is completely automatic and totally decentralized. It’s a huge step forward in trying to move away from huge Web2 legacy technology.
It’s currently live on Ethereum along with the Goerli and Sepolia testnets, as well as many EVM networks and testnets right now including Polygon’s Mumbai testnet.
- Technical Analysis Favorable
For those into trading, the technical analysis for Chainlink is looking good as you see in this chart here.
Let's not forget that Chainlink has broken its Macro Downtrend#LINK #Crypto #ChainLink pic.twitter.com/2ivDtTOlJT
— Rekt Capital (@rektcapital) October 5, 2023
A break in a long-term downtrend line means Chainlink could be ready to break out on the upside. And traders will tell you, when a trend is broken like this, the move can be explosive. This long-term breakout happened at a little over $7.
- CCIP
Chainlink’s Cross-chain interoperability protocol is a big deal too. It allows for the easy building and connecting of dApps across chains. Here’s an announcement from earlier this week on an RWA (real-world asset) platform picking CCIP to connect from Celo to Ethereum and Polygon. The platform is Untangled Finance.
And we all know more platforms where the app is available, the more volume it will get. Big wins like this are only the beginning for CCIP.
Another big institutional win for Polygon @0xPolygonLabs and @chainlink's CCIP with tokenized credit RWAs (Real World Assets) on @UntangledFin's platform. Congrats! 👏🏻🤩 RWA market size to grow to US$5 trillion? 🤔 pic.twitter.com/iDLHIKtetn
— lindyhan (@lindyhan) October 11, 2023
It even works with legacy Web2 institutions like the Hong Kong Monetary Authority. Just like oil needs a pipeline to get to where the people are to buy gas, the data pipeline in Web3 goes through Chainlink.
What We Don’t Like About Chainlink
OK now that we’ve hit the pros, what about the cons? What DON’T we like about Chainlink? I know if you listened to the last section, it sounds like there’s nothing we don’t like. But every project has shortcomings. The question is are they enough to erase the positives the project offers?
- Lack of Purity
If you are a Web3 purist, you may not like the fact that Chainlink is working with legacy Web2 institutions like the HK Central Bank.
- Too Centralized?
There was a time when Chainlink was very centralized. It had only 3 nodes for oracles at one point. It no longer has 3. But it only has 27 now. That’s MUCH less than many projects we think of as centralized.
- Not Enough Utility in the Token
Only very recently could you stake your $LINK and earn money on it. It was a long time coming. For many long-term holders, Chainlink was a mostly dead token that represented an important project for the industry.
And with Version v0.2 you have to be eligible to stake. It’s not automatic. Plus, the staking is capped at 45 million LINK. That’s only ~9% of the circulating supply. So that’s not that much and not much of an opportunity.
What it really means is that you are in the “Number Go Up” camp. Only with increases in price can you really make money with Chainlink.
The Verdict
So we have 4 positives and 3 negatives for Chainlink. So what do we really think? It’s simple really.
Web3 infrastructure is one of the safest bets in crypto. And in oracles and moving off-chain information on-chain, no one is as important as Chainlink. They are #1 and still rising. They play a vital role in enabling smart contracts.
We like the CCIP protocol and what that enables too. We are buyers here.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.
