Legend: The distribution of LINK tokens across the Chainlink network, on May 26th, and a month later on June 25th, 2020. This only looks at the ‘active supply’, or the tokens that have changed hands in the past 30 days.
Chainlink Marines are growing in numbers.
Looking at Chainlink’s on-chain activity, we can see that “top holders” in light blue are growing in size. ‘Top holders” are accounts that hold a meaningful percentage of the active supply. They call themselves the “LINK Marines” on social media, and are known for their devotion to the project.
Meanwhile, the amount of tokens held by exchanges is declining. The major drop in tokens held by Binance (dark blue bubbles) is especially telling of the current trend.
Chainlink has a very engaged community. The fact that more users are accumulating LINK, points to a very healthy ecosystem that is becoming increasingly decentralized and active. Our benchmarks, which compare Chainlink’s data to over 40 other blockchains we monitor, place Chainlink far above others in terms of the median number of unique addresses active daily on the network.
Real users and a high market cap (currently at $1.7B) is a rare combination for any crypto protocol. So why does Chainlink have so many devoted backers, and what are they doing with their tokens?
Most of the token supply is used for speculation, not for price feeds.
Mapping out the distribution of LINK’s active supply shows that most of the activity is happening between users and exchanges. In comparison, the amount of tokens rewarding oracles and aggregators (bottom right in orange) remains very small.
This may come as a surprise considering the LINK token’s primary purpose is to reward node operators. But the truth is that these rewards are relatively small and don’t pay much.
The fact that users are trading their tokens on exchanges reflects the token’s increasing value. The protocol is still young and has already inked cross-industry partnerships with Google and Tezos for example. The supply share used to reward node operators is likely to keep growing as more use cases emerge.
The Chainlink Foundation spends more than average on development.
The supply of LINK tokens is fixed at 1 billion LINK. The team and foundation were allocated a certain percentage of that. The more they spend, the more decentralized the supply will be.
Looking at the flow of assets from the Chainlink Foundation (in pink), we can see that exactly 500K LINK tokens are sent twice a month to network operators. That’s almost $5 million (1 LINK token is worth $4.76 USD at the time of writing) spent on rewarding users for network services.
In comparison, the Ethereum Foundation rolled out $30M last year for development, which amounts to $2.5M a month.
The consistent and heavy inflow of funding for development is part of what makes Chainlink’s blockchain technology so robust. It installs trust in the project, and is clearly driving network growth.
DeFi apps saw a net inflow of 1 million tokens in the last 30 days.
We can see that the DeFi cluster (top left in purple) grew pretty dramatically throughout the course of the month. This cluster represents the amount of tokens traded in the past 30 days on decentralized platforms and/or exchanges (DExes).
This is due to the fact that a lot of LINK was deposited on decentralized lending platforms. A good example of this is the Aave platform, which currently holds $34M in LINK for users to borrow and pay interest on.
Chainlink aims to bring real world data onto blockchain networks, so that smart contracts can interact with events and information that exists off-blockchain. The protocol offers a potential solution to what is known as the “oracle problem,” or the ability to get the off-chain data needed in many smart contracts. Given that blockchains are intended to operate as “trustless” networks, using outside data requires integrating with a trusted source – an “oracle.”