Original author: Miles Deutscher, crypto KOL
Original translation: Yuliya, PANews
As RWA tokenization and institutional adoption become the core narrative of this bull market, Chainlink is poised to become the biggest winner as a key infrastructure connecting traditional finance and the digital world. Miles Deutscher points out that Chainlink is not just a project; its value capture mechanism forms a powerful 'flywheel effect'—the growth in network usage will directly translate into continuous buying pressure and value accumulation for the $LINK token.
Notably, the recently launched '$LINK Reserve' mechanism by Chainlink has allowed the market to witness the true driving force of the 'flywheel effect.' This mechanism automatically converts and accumulates revenue from corporate partnerships and on-chain services into $LINK tokens, thereby directly linking the fundamental growth of the network with token value. Since the announcement, the price of $LINK tokens has risen nearly 50%. Below is the original text, which has been translated by PANews.
$LINK may be one of the most apparent large-cap investment opportunities in this cycle, but most people may miss it. It is the biggest winner benefiting from the institutionalization of cryptocurrency and the explosive growth of stablecoins, tokenization, and RWA (real-world assets).
The current bull market aligns closely with Chainlink's narrative, primarily due to the following reasons:
Alignment with macro trends
The total locked amount of RWA has surged 13 times in the past two years, growing from about $1 billion to over $13 billion, becoming one of the fastest-growing sectors in the cryptocurrency space.
Institutions have recognized that the traditional SWIFT system is slow and inefficient, and they no longer want to face the pain points of fragmented compliance but rather hope to use a complete end-to-end platform. This is why Wall Street giants like BlackRock are actively pushing for asset tokenization and why companies like Stripe (launching Tempo Chain) and Circle (launching ARC Chain) are building their own blockchains.
In a fragmented, multi-chain environment, 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 impressive 84% market share in the Oracle market on Ethereum, making it core infrastructure for this multi-trillion-dollar transformation.
It is currently difficult to predict which L1 public chain will prevail, especially with many enterprise chains entering the market, nor can it be determined which RWA applications will stand out. However, it can be confirmed that Chainlink is powering all of this, becoming the quintessential 'gold rush shovel' investment target.
For a long time, the market generally believed that XRP would be the representative of institutional adoption, but in many respects, LINK has penetrated this field even more than XRP, and considering valuation, its upside potential is more attractive.
Data comparison
· XRPL DeFi TVL approximately $85 million
· Chainlink Total Value Secured (TVS) is approximately $84.65 billion
Chainlink has over 1000 times more capital locked on-chain than XRPL, and its market share across the entire DeFi space is continuously increasing, currently reaching 68%. Nevertheless, 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.
Notably, aside from Bitcoin and Ethereum, Chainlink is far ahead of any other protocol in terms of adoption in the traditional finance (TradFi) sector and has been integrated by several TradFi giants, including:
· SWIFT
· DTCC (Depository Trust & Clearing Corporation)
· Euroclear
· JPMorgan
· Mastercard
Token economics: Building the value flywheel
The value flow of the Chainlink network is primarily achieved through the following means, 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 such as SWIFT or JPMorgan, which pay to integrate Chainlink's solutions. A portion of the funds will enter the Chainlink reserve fund to support its long-term development.
Currently, the protocol automatically converts all revenue (including $ETH or $USDC fees from private chains) into $LINK and deposits it into a strategic treasury.
Additionally, the staking mechanism is crucial. Users lock up $LINK to secure the network and earn approximately 4.32% sustainable annual yield. This creates a continuous supply contraction mechanism, removing tokens from the open market.
This creates a permanent, automated repurchase mechanism, directly translating the network's adoption rate into buying pressure, forming a powerful value flywheel:
Adoption increases → Revenue rises → More $LINK is purchased and locked → Network security and resources enhance → Utility improves
Technical analysis and summary
From a technical chart perspective, $LINK has broken through the $20 weekly resistance zone. This price level has been a significant bullish-bearish pivot point for years, comparable in importance to ETH's $4000 level.
In summary, Chainlink's value can be understood this way: If AWS, Azure, and GCP (the three major cloud service providers) were spun 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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