Crypto Academy / Season 4 / Week 7 - Homework Post for [Allbert]- Polkadot ecosystem, the Ethereum’s Contender.

Hello friends and welcome to my assignment task by professor @allbert, In this assignment, I will provide a detailed review of chainlink oracle, the official oracle for Polkadot blockchain. I hope you enjoy the class.

Question one

Explain in your own words why you chose it and why do you think it is relevant to the world?

The features on this network are stealing the hearts of crypto enthusiasts, the interoperability and innovation on the network make it such. Polkadot happens to have emerged from ICO which is initial coin offering. It received a whopping sum of 140 million dollars as startup funds, making it one of the most funded projects out there. Dr. Gavin Woods and Robert Habermeier who are the co-founders of the network have been working hard to see that there is completion in the launch of the platform which began in May 2020. The term The Blockchain of All Blockchains has been associated with Polkadot because the network is like a compound substance. Compound in the sense that, it was built using Substrate composed of several elements.

Furthermore, the Relay Chain is at the heart of the ecosystem, because its mainly in charge of network compatibility and the security across a lot of networks. It uses the (hub and spoke) mechanism to help keep the parachains and parathread secure

ChainLink

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Chainlink is a decentralized blockchain-based on the Ethereum network. The network is fashioned in such a way that it makes it easier to move tamper-proof data from off-chain places to smart contract locations on the blockchain. The founders of the network claim that through the act of linking the data directly to real-world happenings, it can be used to verify if the requirements of a smart contract have been met in such a way that it is not dependent on any of the deal’s stakeholders. At the time of writing this assignment, according to coinmarketcap, this token was ranked 17th in the market ranking, having a price of $28.57. Chainlink’s market capitalization was $13, 127,743,255. The LINK token from the CHAINLINK is an ERC677. This is an extension of the ERC20 standard. Tokens serve as data payload, they help in delivering important data from off-chain sources to smart contracts. The value that is created from these tokens based on Chainlink, is used to settle node operators for gaining access to data from smart contracts.

Chainlink’s Relevance

Chainlink was among the pioneering networks that permit off-chain data to be used in smart contracts. The network is a major participant in the data processing arena, having a number of reliable partners. The Chainlink network has attracted the attention of several reputable data providers, such as Brave New Coin, Alpha Vantag, etc, due to its integration of off-chain data. Furthermore, data suppliers can sell directly to Chainlink, allowing them to monetize their data.

As a decentralized network, it allows people to become node operators and earn incentives by championing key data infrastructure which is required for blockchains operation.
Furthermore, the ChainLink protocol has important innovations that are very important to its core running and application to the real world. I will be highlighting the important innovative processes, they include:
Selection Of Oracle.

In most cases, a Service Level Agreement (SLA) that specifically points out the type of data required is designed by ChainLink service users. The most appropriate oracle that helps in providing this data is connected by the ChainLink software to correlate with the Service Level Agreement. The parameters are arranged properly and the user submits the SLA is submitted alongside the Link coins that would be put into the order-matching contract which are saddled with the responsibility for accepting bids.

Reporting Of Data

Immediately there is a request for data from the real world, the oracle then connects the external data. Furthermore, when they are obtained the oracles process the data, and to come the operation, it pushes them back to the on-chain contracts which need them.

Aggregation Of Results

This is the last phase of the innovation brought by the ChainLink protocol in its attempt to return to the Aggregation Contract, because of the data which was obtained which must have been dunes together by the oracles. As soon as the Aggregation Contract receives a data point, the next step is that it assesses how valid each of the data points is.

Furthermore, it makes use of the tallied data, to produce a heavier score which is taken back to the smart contract or user.

Question 2

Description of the project and its platform?

The blockchain technology has been on the rise since the invention of Bitcoin. Decentralization and security are just two out of the myriads of the advantages the technology can provide. However, it is not all rosy, there are limitations to what the technology can offer and that is where CHAINLINK comes in.

It is a Decentralized oracle network that has applications in the real world. The network’s goal is to bring back information on a wide range of external data sources. Consequently, blockchain is exceptional-it provides a decentralized and very secure database for transactions digitally but, it is exceptional at receiving input for things that happen outside the boundary of the blockchain. The live markets are influenced by a variety of off-chain forces, for example, fiat currencies and so on. The good news is that Chainlink can provide input to smart contracts, why? This is because it is a decentralized oracle.

The native token of this network is LINK. This token is designed to assist the growth of the project and it is quite similar to BTC, ETHC, etc. Furthermore, BTC serves as an incentive for its users to mine, the native token of the CHAINLINK network. The token debuted in the year 2017, with a price less than 20 cents, and was below $1 until the year 2019. Furthermore, it gradually began to rise in the year 2020. It has since been on the rise and fall. This network alongside other hardware helps to minimize the reliability issue that might arise if using only a single centralized source

What are Parachains?
These are self-contained blockchains that can issue their own coins and be actually tailor-made to meet certain needs. Furthermore, Polkadot is a cross-chain communication platform that is not only about tokens, it allows for communication between private and public blockchain. The ecosystem’s objective is to create a completely decentralized network that people have control over.

To have an understanding of this project, we have to grasp what certain concepts are:

Smart Contracts

These are blockchains are pre-specified agreements that help deal with data and execute it automatically so long as certain conditions are met. Crowdfunding is a concept that exemplifies this; if a certain amount of ETHER is deposited by a certain date, and agreed incentive is paid to the fundraiser. If the reverse is the case, the payments will be returned to the donors. Since smart contracts are stored on blockchain, they cannot be modified although, they can be seen by all, ensuring a high level of trust within trustees. There will only be executions after certain criteria are met.

Oracles

This is important in the network. This is a piece of middleware software that has certain functions such as translation and conversion of data from the real world to smart contract platforms and vice versa. Furthermore, Chainlink is a decentralized network of nodes that helps you connect off-blockchain information and data to on-blockchain smart contracts through what is known as ORACLES.

Chainlink Smart Contracts

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i. The smart contract that is built on the blockchain needs data and because of this need, it releases a request known as Requesting Contract to obtain the data as shown in the first box above.

ii. This request is then registered by the protocol. It is registered as an event and a corresponding smart contract called the ChainLink SLA is immediately created to carry this request off-chain. Simultaneously, the ChainLink SLA creates the ChainLink Reputation Contract, and the ChainLink Order-Matching contract, and the ChainLink Aggregating Contract, as three subcontracts as depicted in the image above as well.

iii. The ChainLink Reputation contract; this is the track record of an oracle provider. It is verified to test the veracity of its performance in history in order to put aside nodes that are unreliable and disreputable.

Furthermore, If the contract that sends the request does not select specific nodes, the ChainLink Order-matching Contract takes the request of the Requesting Contract and takes it to the nodes of the ChainLink protocol. After that happens it collects the bids that each of the nodes places on the request and finally, it selects the type of the node and the exact number of nodes that are needed to complete the request.

In conclusion, the ChainLink Aggregating Contract is saddled with the responsibility for taking up the data from all the oracles that are selected and validating the data which is a way of presenting an accurate result to be used in the execution of the smart contract

To get this off-chain data, this request is recorded as an EVENT and a matching contract is produced. As shown in the images above.

LINK is orchestrated on ETHEREUM which is in accordance with the ERC-20 tokens. Through several exchange platforms, it can be traded for fiat.

In summary, Chainlink is an open-source blockchain layer for constructing, running, and operating decentralized oracle networks that help in providing secure and tamper-proof data inputs and outputs to smart contracts on any blockchain. The platform's oracles are used by top DeFi apps like Synthetix and Aave Network, by extension other numerous blockchains like Ethereum, Polkadot, and large corporations like Google, etc

Question three

Functionalities and real-life application.

By the reason of the inability of blockchains to interface directly with the practical world, its functionality is limited. This problem is solved by Chainlink and other oracle-based networks. It will then allow users to transfer data securely from the real world to the blockchain world.

• It is a decentralized oracle that has a great capacity for extension. The extensible feature of the platform allows it to offer information on nearly anything and everywhere
• As stated above, extensibility makes anything conceivable. Furthermore, the system is totally decentralized, designed with accurate security.
• Chainlink’s installation is straightforward which allows for the quick expansion of the networks node network

The network management in the ChainLink protocol is decentralized. This characteristic is quite common in the administration of blockchains and some private networks that claim to provide decentralized interactions. Which isn't true anyway. The network of Oracles makes the operation feasible and ensures that if one goes down, the ecosystem will not be disrupted just like having a backup generator, ready in case there's a power outage. Another aspect of its functionality that is worth mentioning is that it brings Blockchain Technology into the mainstream application. This is a sensitive area. It is one where the current technology has a major flaw, as it is not compatible with many real-world applications. But ChainLink makes blockchain technology more accessible to the general public! That's a good thing. It does this by translating on-blockchain data into off-blockchain information that's interpretable language. This permits a smooth flow of information from the blockchain world to real-life events.

Real-Life Applications

• Aavegotch using Chainlink to Pioneer Dynamic Non-Fungible tokens on Layer 2

Aavegotchi which belongs to Pixelcraft studios is a Decentralized finance game that allows players to stake NFT avatars, with incentives generating tokens and interacting with the game’s universe. It is a combination of decentralized finance and NFTs that helps users not only enjoy the fun of interacting with the platform but also earn incentives.
The network desired a means to decide the design and makeup of newly minted non-fungible token avatars and assign uncommon traits to the already existing avatars through on-raffles. These raffles are fair and tamper-proof. Furthermore, the Chainlink Verifiable Randomness Function (VRF), is one that is decentralized.

An oracle powered service that makes a provision for security and source of on-chain randomness, it does this so that all users may independently verify smart contracts

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• PoolTogether makes use of Chainlink to Fairly Turn Personal Savings into Games

This is a platform that permits users to create, run and manage games that are prize-saving. It operates in a way that you make a deposit in exchange for a chance to win incentives. The interesting part is that even if you don’t get to win incentives, you still get the chance to keep your initial deposit. pool together is a protocol that just newly got established and it is centered on saving money through no-loss reward pools that cumulatively accrue interest and are awarded to a fortunate winner at the end of the game, while everyone else can withdraw their first payments. Sourcing for randomness to select winners, winners that other users would concur to and agree to the decision as just becoming a challenge to the network, this is where Chainlink came into the picture. It delivered a fair and tamper-proof RNG system that was publicly auditable, resulting in fair and impartial wins or losses in gaming outcomes.

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• Ether Cards Uses Chainlink VRF to fashion New Utility to Non-Fungible Tokens

Because blockchain-based digital assets began experiencing surges, NFTs have grown in popularity. We know that the first generation of NFTs generated money as a result of having something both rare and appealing to the eyes. Static digital arts sparked the interest of the NFT market, several early development teams saw the greater value in creating a linkage between special features and privileges to NFT ownership, and this helped in providing individuals and businesses a set of tools to aid them in experiencing meaningful times via non-fungible tokens. Furthermore, ether cards permit users to create dynamic cards that break open new features, offer upgrades, and trigger changes based on real-world happenings.

In addition, a lot of ether card projects need a tamper-proof and visible source of randomness on blockchains in order to help generate rare and scarce NFT features distribute them fairly and include pure chance components in their projects.

So rather than creating their own RNG (Random Number Generator), Chainlink was integrated into the system to save time and resources.

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• Pancakeswap

Having access to a manipulation-resistant source of randomness on-chain is not as easy as it may appear. Miners can manipulate On-chain RNG solutions whereas, off-chain RNG methods are not as easily manipulated because of the opaque nature and lack of proof of fidelity. This is where Chainlink VRF comes into the picture for the PancakeSwap Lottery V2. This is because of the ability of the network to overcome these obstacles.

Every day, two draws take place in the PancakeSwap Lottery. Participants can take part by purchasing six-digit tickets. The number of digits on the user's ticket that match the numbers created by Chainlink VRF, starting with the first one on the left, determines the prize. This is how it's broken down:

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• Aave

This is among the world's most widely used DeFi services. Aave is popular for its decentralized peer-to-peer loan business in the world. It allows users to earn interest by depositing cash or borrowing funds from other users. Furthermore, Chainlink is a smart contract data generator that is specially fashioned to produce the highest quality data possible. As its name suggests, ChainLink serves as a bridge connecting smart contracts and data from outside the blockchain. Chainlink's solution to challenges is used in the operational running of all of the most prominent DeFi providers on the market, not excluding Aave.

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Question four

Future development and associated projects.

To answer this question properly, I won't only mention the future projects but I'll also be highlighting some already established projects within the ecosystem.

• A possible project with SOL

ChainLink is expected to be integrated into the Solana Mainnet Beta platform. The mainnet integration is scheduled to happen soon, as soon as the ChainLink price feeds have gone live on the Solana Devnet.
The integration is slated to take place on or before December 31, 2021. This integration will permit developers to more efficiently design tamper-resistant oracle networks to exploit off-chain data.

CEO of Solana Labs, Anatoly Yakovenko, and the Head of Integration at ChainLink Labs, Johann Eid are optimistic about this program, they opine that this integration will create network effects in which the finest technologies will come together to bring benefit to blockchain users. In addition, they also opine that it will help attract a large number of professional and knowledgeable next-generation developers to the Solana project. Currently, it's one of the blazing altcoins.

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• Possible integration with the DEC explorer

As shown in the screenshot above, on 31st 2021 or even before then, Chain Link has the intention to incorporate ITS services on the DEC explorer. Transactions on ChainLink Decentralized platform would appear on this explorer as a result. This is a good development for the general public as we wouldn't have to switch between different explorers. Furthermore, everyone would be able to both TomoChain and ChainLink from the Decentr's single user interface.

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SOME OF THE RECENTLY ESTABLISHED INTEGRATIONS

• Defi Yield Protocol (Dynamic Yield Protocol)

The Defi yield protocol is an Ethereum-based Defi platform that aims to provide users with numerous ways to earn money. DYP is the first platform that allows users to supply liquidity in exchange for BNB and ETH rewards. Since its inception in 2020, DYP has made significant progress toward establishing a stable network.

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The relationship with the Chainlink network is a huge step forward for DYP. All of DYP's services are based on high-quality data and information. However, because DYP is currently only connected to ETH and BNB, it is unable to access a wide range of additional chains and off-chain market data.

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• Synthetix

Synthetix is a Defi platform that is linked to Chainlink. The Synthetix network is a blockchain-based platform that aims to bring crypto and non-crypto assets together. Stocks, for example, are non-blockchain assets that be converted into blockchain transferrable assets called synths once they are introduced.

Synthetix worked with Chainlink to gain access to Chainlink's oracle's data. Synthetic, as a blockchain network, for example, is not completely capable of obtaining market data on stocks and other financial assets. As a result, the platform needed to chain together price data from the most recent financial markets.

The Synthetix exchange platform has a number of advantages because of the available features on the site https://synthetix.io/, the building, staking and governance features are just a few out of the many.

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• The DeFi Product Suite from UniDex

This is a collection of software that helps you manage your data. UniDex fans will be glad to learn that the project is incorporating Chainlink oracles on its mainnet in order to acquire safe price feeds in the DeFi trading terminal. Chainlink will be able to give the best price information for leveraged positions, prediction markets, options contracts, and Unidex's synthetic concepts as a result of this integration. The pricing feeds are currently denominated in USD.

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• DEX for RAI Finance's Cross-Chain

Building cross-chain exchange protocols becomes much more difficult as no two crypto-assets have the same value at any given time. RAI Finance will incorporate Chainlink price Feeds providing trustworthy pricing information as a cross-chain exchange protocol built on Polkadot. Creating a tamper-proof system while dealing with volatile markets necessitates this level of technology.

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RAI Finance aspires to be the Web3.0 world's epicenter. RAI Finance will launch a new decentralized finance (DeFi) service based on the Polkadot technology and ecosystem, enabling a polymerized connectivity of many sectors such as the generation of blockchain assets, cross-chain trade, and social functions.

• To round up this section, I'll mention one more project is expected to partner with ChainLink in the nearest future

• HACKATHON

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This project is scheduled to start on the 22nd October 2021 till the 28th November 2021. Hackathon is a program that deals with UI/UX programming and much more. By visiting the site, https://chain.link/hackathon, you stand the chance of registering, attending, and winning incentives in addition to the fact that you'll be interacting with experts. That alone is enough reason to register and be a part of the community, there is just so much to gain from the platform by attending.

Question Five

Make a technical analysis of the token of the selected platform, then through your validated exchange account make the purchase of the token (15 USD as a minimum). Screenshots and an explanation of the procedure are required

Because of how volatile the cryptocurrency market is, It's difficult to predict how much (LINK) will be worth in the nearest future however, we expect that it will improve its position and return to the $40-50 price level, potentially even crossing the $100 barrier.

In addition, Chainlink is a solid long-term investment as well as a short-term one. Most Chainlink price predictions opine that this coin will gain in value in the near future and remain strong for the following few years, making it a good investment.

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According to www.coinmarketcap.com at the time of writing this assignment, ChainLink had a trading price of $29. Furthermore, it was ranked 18th in market ranking list with a trading volume and market capitalization of $1,716,323,491.97 and $13,422,130,881 respectively.

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Using the Bolinger Bands indicator and the accumulation/distribution indicator, the analysis of the Token as when writing this assignment, is that the market was in a bearish run on a daily timechart. The break began on the 19th may, 2021 and since then, there have been periods when the market ranges in the opposite direction but the buying pressure isn’t strong enough to cause a bullish run in the market. With the Heikin-Ashi candlesticks, we can see that there have been periods where the trend reverses, traders who trade in short positions can plunge into the market and set a short TP point.

LINK started this year with promising hopes, it continued rising till it hit a fresh all-time high in the Month of May at the price of $52.20. After that, it encountered a big dip. Since then it has been trying to recover although it hasn’t traded higher since then. Peeping at the chart, we hope to witness a wedge breakout soon enough. In the meantime, it is trading around $29 for now as shown above.

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• We can see from the screenshot below, the platforms we can access this token from;

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Buying the Token

Buying this token is easy and direct. The first step is to download the Binance app from google play store or apple store. The next thing is to proceed with the registration and verification processes

• After the completion of your verification, you can fund your Binance wallet through FIAT and other options. The screenshot below shows the current balance of my verified Binance app.

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• The screenshot below shows the token we are considering. LINK, Which can be found by searching for it by clicking on the search icon on the right side of the screen.

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• I input the amount of LINK in dollars I want to buy and the algorithm automatically displayed the amount of LINK tokens I can get. Which is 28.53 USDT for 0.59 LINK token as shown in the screenshot below.

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• By clicking on BUY, the order is filled and we'll be taken to a new page on the Binance platform where we can see the history of the completed transaction.

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Conclusion

ChainLink is an unusual network. Its ecosystem creates room for various types of systems to find expression, its unique characteristics make it stand out. Although the native token is experiencing a little drag in the market we hope that it breaks through and turns bullish. Even game enthusiasts can say that the future of gaming is here. This is based on the interoperability, governance system and verifiable randomness operation provided by Chainlink VRF. It's a gold mine of a network and we believe it's just getting started.

All images used in this post unless otherwise stated were extracted from Binance and Coinmarketcap.

Special thanks to Professor @allbert