Written by: Thejaswini M A
Compiled by: Block unicorn
The 1992 Dream Team crushed their opponents by an average of 44 points in the Olympic basketball tournament, but there’s a detail in this story that most people don’t remember.
They almost lost in their first scrimmage against college players.
The issue is not talent. Michael Jordan, Magic Johnson, and Larry Bird were all on one team, theoretically unbeatable from day one. But the problem is that superstars do not automatically form championship teams. You need a system that can convert individual advantages into collective advantages. You need someone to build the connections that elevate everyone.
Dream Team coach Chuck Daly did what seemed like a very boring thing in the first week, far less glamorous than highlight-reel dunks: he built passing lanes. He identified pick-and-roll timings. He created an infrastructure that transformed a group of Hall of Fame players into an unstoppable force. By the time the Olympics arrived, magic happened. Every pass created better shooting opportunities. Every defensive rotation made the next one easier. Every player made the others more valuable.
The genius lies in creating infrastructure that amplifies the capabilities of everyone.
This is essentially what Chainlink does in the cryptocurrency space.
While other crypto projects attempt to be the Michael Jordan of blockchains, Chainlink quietly becomes the Chuck Daly of digital finance. They build infrastructure that makes it easier for others to take action.
In 2019, Chainlink launched its mainnet with a simple goal: to bring sports scores and weather data onto Ethereum, allowing people to bet on soccer matches without relying on centralized betting companies. Six years later, JPMorgan uses the same infrastructure for cross-chain government bond trading settlements, with the Federal Reserve nodding in approval behind the scenes.
Chainlink solves the so-called 'oracle problem' in the cryptocurrency world, where blockchains are like digital islands that cannot communicate or listen to anything. If you want your smart contract to know the price of apples, whether it rained in Kansas yesterday, or whether someone's bank account really has the dollars they claim, you need something to transmit that information to the blockchain. That something is an oracle, and Chainlink is the oracle that has consumed all others.
Chainlink has supported over 60% of decentralized finance (DeFi) value, nearly 80% on Ethereum. As traditional assets migrate on-chain, they will require the same infrastructure as DeFi. Chainlink is the market pioneer and is building the standards that other platforms will follow.
Let me explain this infrastructure.
Chainlink did not initially intend to be a bridge between Wall Street and Web3. But at some point, traditional financial institutions realized a problem: if you want to tokenize government bonds, you need a way to prove that the bonds actually exist and are worth what you say.
Thus, Chainlink's Proof of Reserve system emerged, which sounds advanced, but is actually just a very complicated way to prove you're not running a fractional reserve scheme.
Suddenly, every major stablecoin issuer needs this service, as simply telling people 'trust us, we absolutely have $100 billion in government bonds' is no longer sufficient to satisfy regulators, especially in the wake of the Terra and FTX crises.
Then came the launch of the Cross-Chain Interoperability Protocol (CCIP), which allows assets to move between different blockchains. It's like building a universal translator. It helps banks communicate across blockchain barriers. As a result, JPMorgan can now send tokenized deposits from their private Ethereum network to the public Solana network, with Chainlink acting as the trusted messenger.
Chainlink also builds tools specifically to help institutions comply with regulations.
Their new Automated Compliance Engine (ACE) can automatically handle all regulatory paperwork to make crypto transactions legal. Want to move tokenized assets between blockchains while maintaining Anti-Money Laundering (AML) compliance, Know Your Customer (KYC) verification, and audit trails? Chainlink will automatically handle all of this, ensuring every transaction meets any regulatory requirements in your jurisdiction.
This perfectly positions them for the upcoming wave of tokenized finance. Every bank, asset management company, and government agency wanting to experiment with blockchain technology first needs to address compliance issues.
Chainlink's 2025 narrative is particularly compelling.
Tuttle Capital applied for the first Chainlink ETF (exchange-traded fund) in January, with a decision from the U.S. Securities and Exchange Commission (SEC) expected in the fall of 2025. The timing perfectly aligns with the current regulatory environment supporting cryptocurrencies.
JPMorgan's Kinexys used Chainlink to complete the first cross-chain currency settlement between traditional banking systems and public blockchains.
The Intercontinental Exchange, the parent company of the New York Stock Exchange, integrates Chainlink data streams to bring forex and precious metals data on-chain. When the largest stock exchange in the world needed oracle infrastructure, they chose Chainlink.
Mastercard partnered with Chainlink to enable its 3 billion cardholders to buy cryptocurrency directly. When payment processors need compliant crypto infrastructure, they choose Chainlink.
Chainlink launched data streams for the US stock market and ETFs, providing real-time price data for stocks like Apple, Tesla, and the S&P 500 index.
The central banks of Brazil and Hong Kong are using Chainlink for central bank digital currency (CBDC) pilots and cross-chain settlement experiments. When governments need blockchain infrastructure, they choose Chainlink.
The pattern is consistent: when institutions move from experimental stages to production deployment, they standardly choose Chainlink.
The 'flywheel' of the treasury printing machine goes live
In August, Chainlink announced a program called 'Chainlink Reserve,' essentially a Chainlink version of a stock buyback program. The company uses the fees it receives from enterprise clients (JPMorgan, Mastercard, New York Stock Exchange) to purchase LINK tokens on the open market.
Here’s how the flywheel works:
Step one: enterprises pay for Chainlink's data streams, cross-chain services, and compliance solutions. Co-founder Sergey Nazarov confirms that they have generated 'hundreds of millions in revenue,' a significant portion of which is off-chain.
Step two: all payments—whether fiat, stablecoins, or other tokens—are automatically converted to LINK through its payment abstraction system.
Step three: a portion of LINK goes into strategic reserves and is locked up for years.
Step four: as more institutions tokenize assets, the demand for Chainlink services increases, generating more revenue and more automatic buybacks of LINK.
The beauty of this system is that it ties the demand for LINK directly to real-world commercial adoption. Traditional crypto projects rely on speculation or token utility within their ecosystems.
Since launching the reserve program, they have accumulated over 150,000 LINK tokens, worth about $4.1 million. This may not seem like much, but considering the growth trajectory. They are transitioning from pilot projects to production deployment across multiple institutions.
Chainlink is evolving from a data provider to what Sergey Nazarov calls a 'transaction system.' Modern institutional trading requires more than just price data:
Data streams: for accurate pricing and valuation
Cross-chain capabilities: moving assets between different networks
Identity and compliance: meeting regulatory requirements
Proof of reserve: verifying supported assets
Reporting and auditability: meeting institutional oversight needs
Chainlink may be the only provider offering all these services in a single integration. When institutions want to tokenize assets, they can simply partner with Chainlink instead of piecing together solutions from multiple providers.
This uniquely positions them for the upcoming wave of tokenization. As Nazarov pointed out in a recent interview, currently, less than 1% of assets globally are tokenized. Even reaching 5% would imply a tenfold expansion of the entire cryptocurrency market.
The scale of this opportunity is staggering. Traditional finance represents approximately $500 trillion in assets. Chainlink's argument is that most of these assets will eventually migrate on-chain, and they will all need the comprehensive infrastructure services that Chainlink can provide.
The divide between Bitcoin and tokenization
Sergey Nazarov raises a compelling argument about the future of cryptocurrency. Bitcoin may capture safe-haven demand during turbulent times, potentially reaching trillions of dollars in value. But tokenized assets will exceed Bitcoin by several orders of magnitude.
Bitcoin, as digital gold, attracts investors seeking uncorrelated assets during uncertain times. Tokenized assets are more efficient versions of existing financial products, with values reaching trillions of dollars.
When sovereign wealth funds and pension funds allocate to crypto assets, they won't invest 50% in Bitcoin. They will maintain a diversified portfolio that includes stocks, commodities, bonds, and real estate—just in tokenized form. The potential market for tokenized assets is the entire traditional financial system.
This shift will fundamentally change our definition of 'cryptocurrency.' The crypto space will no longer be defined by cryptocurrencies like Bitcoin and Ethereum, but by the tokenized versions of traditional assets. Chainlink is positioning itself as the indispensable infrastructure in this transformation.
Supply dynamics
The circulating supply of LINK has increased from 470 million tokens in 2021 to 680 million today, a 44% increase, which seems alarming until you understand the use of these tokens.
The dilution of these 210 million tokens funded the most aggressive infrastructure buildout in cryptocurrency history.
Supply expansion essentially represents Chainlink's Series A, B, and C funding rounds, only they did not give equity to venture capitalists but funded development by selling tokens. Critics call it dilution, while supporters call it a necessary investment.
According to Tokenomist data, 41% of the total supply of LINK (411.9 million tokens) remains locked, with no planned unlocking events. This indicates that the major dilution phase may have already passed, with most historical unlocks occurring during the development period from 2018 to 2022.
The strategic reserve launched in August 2025 fundamentally changes this dynamic.
41% of tokens remain locked, with no plans for unlocking.
The strategic reserve creates ongoing buying pressure.
The net effect depends on the balance between corporate revenue growth and future unlocking decisions.
Early accumulation data shows reserves are steadily growing.
This timing creates an interesting inflection point. Supply growth funds the infrastructure that now generates hundreds of millions in enterprise revenue. This revenue, in turn, funds strategic reserves, removing tokens from circulation as institutional adoption accelerates.
What seemed like bearish dilution over the past few years has become the cornerstone of sustained demand in 2025 and beyond. Investors focused on supply expansion have overlooked the infrastructure being built. Investors only focusing on current buyback amounts may miss the revenue trajectory that will determine the speed of future accumulation.
All of this raises a question.
What happens when the infrastructure layer becomes more valuable than the applications running on it?
By 2025, Chainlink's total value locked (TVL) will surge to over $93 billion in decentralized finance protocols, tokenized assets, and cross-chain infrastructure. They provide data streams for thousands of DeFi protocols. They are the bridging technology that allows traditional banks to experiment with public blockchains. They are building compliance tools that determine which crypto applications are legitimate and which are not.
This $93 billion is not the value of the infrastructure—it entirely depends on the application value of Chainlink's infrastructure. The infrastructure is Chainlink's oracle network, data streams, and cross-chain messaging system.
But if Chainlink were to disappear tomorrow, how much of that $93 billion would become worthless? How many DeFi protocols would cease to operate? How many tokenized assets would lose price data?
The answer is: most. This indicates that the infrastructure may already be more valuable than the applications, even if the market has yet to realize it.
They have become systemically important in the crypto space, a status few protocols achieve. The network effects are evident: the more institutions use Chainlink, the more others want to use Chainlink because everyone else is already using Chainlink.
In crypto, when everyone needs the same underlying service, network effects become self-reinforcing. The more institutions use Chainlink, the more others want to use it, because everyone else is already using Chainlink. Revenue is sticky because, regardless of which applications succeed or fail, the infrastructure continues to earn fees. DeFi protocols come and go, but the data layer supporting all these protocols keeps charging fees. Applications are commodities, while infrastructure is a monopoly. And monopolies, as we know, often capture most of the value in an ecosystem.
Cracks in the foundation
But let's candidly discuss the potential issues because Chainlink's bullish argument assumes many things that may not hold true forever.
The first question is that oracle networks are technically difficult to build. But the challenge lies not in the software but in getting everyone to agree on using your version. Chainlink's moat is network effects and first-mover advantage, not some insurmountable technical barrier. Google and Amazon could build competitive oracle services tomorrow if they wanted to. So could Microsoft. Any large cloud provider with a strong engineering team could.
The second issue is regulatory capture risk. Chainlink has become so systemically important that if it fails, a large portion of the tokenized financial system would collapse with it. This is precisely the 'too big to fail' scenario that makes regulators nervous. What happens if a senator realizes that a private company with no government oversight controls the data streams of trillions in tokenized assets? Chainlink could suddenly find itself facing regulatory scrutiny that could turn a profitable business into a compliance nightmare.
The third question is the tokenization assumption. Chainlink's entire value proposition relies on traditional finance migrating en masse to on-chain. But what if it doesn’t? What if banks decide their private blockchains are good enough and don’t need to interact with public chains? What if the regulatory environment changes to make tokenization harder rather than easier? Chainlink is building infrastructure for a future that may not happen.
The fourth question is competition from the entities they serve. JPMorgan is currently using Chainlink, but JPMorgan also has thousands of engineers and billions in R&D budgets. How long would it take them to decide to build their own oracle system instead of paying Chainlink forever? This question applies equally to every large bank and asset management company attempting to tokenize.
The last question is whether any middleware company can maintain pricing power in the long term. History shows that infrastructure layers often become commoditized over time. The internet started with expensive dial-up services and eventually became commoditized broadband. Cloud computing began with Amazon charging high prices and eventually turned into competition among multiple providers on cost. Why would oracle networks be different?
Chainlink bets that they can maintain network effects and switching costs indefinitely. This is possible, but such bets often hold until they suddenly don't.
But for now, this success story looks starkly different from the decentralized, disintermediated financial system originally envisioned for cryptocurrencies. Instead, it appears more like an old system with more refined APIs. Banks are still banks, regulators are still regulators, and funds still flow through institutions that governments can control.
Chainlink has not replaced the traditional financial system. They built a translation layer that allows the traditional financial system to 'speak blockchain language.' Now, as this translation layer becomes indispensable, it remains unclear whether cryptocurrency provides better tools for decentralized finance or merely for centralized finance.
