Author: Miles Deutscher
Compiled by: Yuliya, PANews
As RWA tokenization and institutional adoption become the core narrative of this bull market, Chainlink, as the key infrastructure connecting traditional finance and the digital world, is poised to become the biggest winner. Miles Deutscher points out that Chainlink is not just a project; its value capture mechanism creates a powerful 'flywheel effect'—the growth in network usage will directly translate into sustained buying pressure and value accumulation for $LINK tokens.
It is worth noting that Chainlink's recently launched '$LINK Reserve' mechanism has allowed the market to witness the true driving force behind the 'flywheel effect.' This mechanism automatically converts and accumulates revenue from corporate partnerships and on-chain services into $LINK tokens, directly linking the network's fundamental growth to token value. Since the announcement, the price of $LINK tokens has increased by nearly 50%. The following is the original text of the article, which has been compiled by PANews.
$LINK may be one of the most obvious large-cap investment opportunities in this cycle, but most people may miss it. It is the biggest winner benefiting from the institutionalization of cryptocurrencies and the explosive growth of stablecoins, tokenization, and RWA (Real World Assets).
This bull market narrative is highly aligned with Chainlink, mainly due to the following reasons:
Alignment with macro trends
The total locked value of RWA has surged 13 times in the past two years, growing from around $1 billion to over $13 billion, becoming one of the strongest growth sectors in the crypto space.
Institutions have recognized that the traditional SWIFT system is slow and inefficient, unwilling to face the pain points of fragmented fulfillment, and instead wish to use a complete end-to-end platform. This is also why Wall Street giants like BlackRock are actively promoting asset tokenization and why companies like Stripe (launching the Tempo chain) and Circle (launching the ARC chain) are building their own blockchains.
In a fragmented, multi-chain coexistence landscape, a 'universal translator' is needed for interoperability, and Chainlink is providing this solution. Any tokenized stocks, bonds, or real estate require an oracle to bring their value on-chain, and $LINK is the market leader, holding an 84% share in the Oracle market on Ethereum alone, making it the core infrastructure of this multi-trillion dollar transformation.
It is currently difficult to predict which L1 public chain will prevail, especially against the backdrop of numerous enterprise chains entering the market, and it is also uncertain which RWA application will stand out. However, it can be confirmed that Chainlink is powering all of this, becoming the most typical 'gold rush shovel' type of investment target.
For a long time, the market has generally believed that XRP would become the representative of institutional adoption, but in many ways, LINK has even higher penetration in this field than XRP. Considering its valuation, its upside potential is more attractive.
Data Comparison
XRPL DeFi TVL is approximately $85 million
Chainlink's Total Value Secured is approximately $84.65 billion
Chainlink has locked up more capital on-chain than XRPL by over 1000 times, and its market share in the entire DeFi space is continuously increasing, currently reaching 68%. Nonetheless, XRP's market cap is still about 12.1 times that of LINK, making LINK's value in the current price range appear more attractive.
It is worth noting that besides Bitcoin and Ethereum, Chainlink is far ahead of any other protocol in terms of adoption in traditional finance (TradFi) and has been integrated by multiple TradFi giants, including:
SWIFT
DTCC (Depository Trust & Clearing Corporation, USA)
Euroclear (European Clearing Bank)
JPMorgan
Mastercard
Token Economics: Building the Value Flywheel
The value flow of the Chainlink network is mainly realized through the following ways, with two sources of income:
1. On-chain fees: When its services are used across different blockchain networks, on-chain fees are incurred. These fees are used to fund network operations and repurchase $LINK tokens.
2. Corporate partnerships: Reaching agreements with large companies and institutions like SWIFT or JPMorgan, which pay to integrate Chainlink's solutions. A portion of the funds will go into the Chainlink reserve to support its long-term development.
Currently, the protocol will automatically convert all income (including fees from private chains such as $ETH or $USDC) into $LINK and deposit it into a strategic treasury.
In addition, the staking mechanism is also crucial. Users secure the network by locking $LINK and earn approximately 4.32% sustainable annualized returns. This creates a continuous supply tightening mechanism that removes tokens from the public market.
This creates a permanent, automated repurchase mechanism that directly translates network adoption into buying pressure, forming a powerful value flywheel:
Increased adoption → Increased revenue → More $LINK purchased and locked → Enhanced network security and resources → Improved utility
Technical Analysis and Summary
From a technical chart perspective, $LINK has broken through the weekly resistance zone of $20. This price point has been a significant bull-bear conversion point for years, and its importance is roughly equivalent to ETH's $4000 level.
In summary, Chainlink's value can be understood as follows: If AWS, Azure, and GCP (the three major cloud service providers) were to spin off from their parent companies, their value would reach trillions of dollars. Chainlink is the foundational B2B infrastructure of the entire on-chain economy.
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