Author: Thejaswini M A
Compiled by: Block unicorn
The 1992 Dream Team dominated their opponents in Olympic basketball by an average of 44 points, but there's a detail to the story that most people don't remember.
They nearly lost their first scrimmage against college players.
The problem isn't talent. Michael Jordan, Magic Johnson, and Larry Bird on the same team should theoretically be unstoppable from day one. The problem is, superstars don't automatically make a championship team. You need a system that can transform individual strengths into collective advantage. You need someone to build the bonds that elevate everyone to the next level.
In Week 1, Dream Team coach Chuck Daly did something seemingly unremarkable, far less spectacular than a highlight-reel dunk: He established passing lanes. He identified the timing of the pick-and-roll. He created the infrastructure that transformed a group of Hall of Fame players into an unstoppable force. By the Olympics, something magical happened. Every pass created a better shot. Every defensive rotation made the next easier. Every player made every other player more valuable.
The genius lies in creating an infrastructure that amplifies the capabilities of everyone.
This is essentially what Chainlink does in the cryptocurrency space.
While other crypto projects try to be the Michael Jordan of blockchain, Chainlink has quietly become the Chuck Daly of digital finance. They build the infrastructure that makes it easier for others to invest.
In 2019, Chainlink launched its mainnet with a simple goal: to bring sports scores and weather data to Ethereum, allowing people to bet on football matches without relying on centralized bookmakers. Six years later, JPMorgan Chase leveraged the same infrastructure to settle cross-chain Treasury bond trades, with the Federal Reserve’s backing behind the scenes.
Chainlink solves what the cryptocurrency world calls the "oracle problem," essentially the notion that blockchains act like digital islands, unable to talk or listen to anything. If you want your smart contract to know the price of Apple's stock, whether it rained in Kansas yesterday, or whether someone actually has the dollars they claim in their bank account, you need something to transmit that information to the blockchain. That something is an oracle, and Chainlink is the oracle that's eating all the other oracles.
Chainlink already powers over 60% of decentralized finance (DeFi) value, and nearly 80% on Ethereum. As traditional assets migrate on-chain, they will require the same infrastructure as DeFi. Chainlink is a market pioneer and is building the standard that other platforms will follow.
Let me explain this infrastructure.
Chainlink wasn’t originally intended to be a bridge between Wall Street and Web3. But at some point, traditional financial institutions realized a problem: if you want to tokenize a Treasury bond, you need a way to prove that the bond actually exists and is worth what you say it is.
So Chainlink’s Proof of Reserve system came into being. It sounds advanced, but it’s actually just a very complicated way to prove that you’re not running a fractional reserve scam.
Suddenly, every major stablecoin issuer needed this service because simply telling people “trust us, we have $100 billion in treasury securities” was no longer enough to deal with regulators, especially after the Terra and FTX crises.
Then came 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 Chase can now send tokenized deposits from their private Ethereum network to the public Solana network, with Chainlink acting as the trusted messenger.
Chainlink has also built tools specifically to help institutions comply with regulations.
Their new Automated Compliance Engine (ACE) automatically handles all the regulatory paperwork required 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 automatically handles all of this, ensuring every transaction complies with any regulatory requirements in your jurisdiction.
This makes them perfectly positioned to capitalize on the coming wave of tokenized finance.Every bank, asset manager, and government agency that wants to experiment with blockchain technology first needs to address compliance issues.
Chainlink’s 2025 story is particularly compelling.
Tuttle Capital filed for the first Chainlink ETF (exchange-traded fund) in January, and expects the U.S. Securities and Exchange Commission (SEC) to make a decision in the fall of 2025. The timing aligns perfectly with the current regulatory environment supporting cryptocurrencies.
JPMorgan’s Kinexys used Chainlink to complete the first cross-chain cash settlement between the traditional banking system and a public blockchain.
Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, has integrated Chainlink Data Streams to bring foreign exchange and precious metals data on-chain. When the world’s largest stock exchange needed oracle infrastructure, they turned to Chainlink.
Mastercard partners with Chainlink to enable its 3 billion cardholders to purchase cryptocurrencies directly. When payment processors need compliant crypto infrastructure, they turn to Chainlink.
Chainlink has 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.
Central banks in 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 remains consistent: as institutions move from experimentation to production deployments, they standardize on Chainlink.
The "flywheel" of the vault printing machine is online
In August, Chainlink announced a program called the “Chainlink Reserve,” essentially a Chainlink stock buyback program. The company uses the fees it receives from corporate clients (JPMorgan Chase, Mastercard, the New York Stock Exchange) to purchase LINK tokens on the open market.
Here's how the flywheel works:
The first step: Enterprises pay for Chainlink’s data streams, cross-chain services, and compliance solutions. Co-founder Sergey Nazarov confirmed that they have generated “hundreds of millions of dollars in revenue,” with a significant portion coming from off-chain.
Step 2: All payments — whether in fiat, stablecoins, or other tokens — are automatically converted into LINK through its Payment Abstraction system.
Step 3: A portion of LINK enters the strategic reserve and is locked for many years.
Step 4: As more institutions tokenize their assets, demand for Chainlink services increases, generating more revenue and more automatic buybacks of LINK.
The beauty of this system is that it ties demand for LINK directly to real-world commercial adoption. Traditional crypto projects rely on speculation or token utility within their ecosystem.
Since launching the reserve program, they have accumulated over 150,000 LINK tokens, valued at approximately $4.1 million. This may not seem like much, but considering their trajectory, they are moving from a pilot project to production deployment across multiple institutions simultaneously.
Chainlink is evolving from a data provider to what Sergey Nazarov calls a “trading 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 Reserves: Verifying Backing Assets
Reporting and auditability: meeting institutional oversight needs
Chainlink is likely the only provider that offers all of these services in a single integration. When institutions want to tokenize assets, they can work with just Chainlink instead of piecing together solutions from multiple providers.
This puts them in a unique position to capitalize on the coming wave of tokenization. As Nazarov pointed out in a recent interview, less than 1% of global assets are currently tokenized. Even if 5% were tokenized, it would mean 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 thesis is that most of these assets will eventually migrate on-chain, and they will all require the infrastructure services that Chainlink can comprehensively provide.
The Difference Between Bitcoin and Tokenization
Sergey Nazarov presents a compelling argument for the future of cryptocurrencies. Bitcoin could capture safe-haven demand during periods of instability, potentially reaching trillions of dollars in value. But tokenized assets will outperform Bitcoin by orders of magnitude.
Bitcoin, as digital gold, has attracted investors seeking non-correlated assets during uncertain times. Tokenized assets are more efficient versions of existing financial products, which already have a value exceeding trillions of dollars.
When sovereign wealth funds and pension funds allocate to crypto assets, they don't invest 50% in Bitcoin. They maintain a diversified portfolio of 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 how we define "cryptocurrency." The crypto space will no longer be defined by cryptocurrencies like Bitcoin and Ethereum, but by tokenized versions of traditional assets. Chainlink is positioned as an essential piece of infrastructure in this transformation.
Supply Dynamics
LINK’s circulating supply has increased from 470 million tokens in 2021 to 680 million today, a 44% increase, which looks worrying until you understand what these tokens are used for.
This dilution of 210 million tokens funded the most radical infrastructure build in cryptocurrency history.
This supply expansion is essentially Chainlink’s Series A, B, and C rounds, except instead of handing equity to venture capitalists, they’re funding development through token sales. Critics call it dilution, while supporters call it necessary investment.
According to Tokenomist data, 41% of LINK’s total supply (411.9 million tokens) remains locked with no scheduled unlocking events. This suggests that the main dilution phase may be over, with most historical unlocks occurring during the 2018-2022 development period.
The launch of the Strategic Reserve in August 2025 fundamentally changed this dynamic.
41% of tokens are still locked with no plans to unlock
Strategic reserves create sustained buying pressure
The net effect depends on the balance between corporate revenue growth and future unlocking decisions
Early accumulation data shows continued growth in reserves
This timing creates an interesting inflection point. Supply growth funds infrastructure that now generates hundreds of millions of dollars in enterprise revenue. This revenue, in turn, funds a strategic reserve, removing tokens from circulation as institutional adoption accelerates.
The seemingly bearish dilution of the past few years has become the cornerstone of sustained demand through 2025 and beyond. Investors focused on supply expansion overlook the infrastructure being built. Investors focusing solely on current repurchase volumes may miss the revenue trajectory that will determine the pace of future accumulation.
All this begs the question.
What happens when the infrastructure layer becomes more valuable than the applications running on it?
Chainlink's total value locked (TVS) in decentralized finance protocols, tokenized assets, and cross-chain infrastructure surged to over $93 billion in 2025. They provide data streams to thousands of DeFi protocols. They are the bridge technology that allows traditional banks to experiment with public blockchains. They are building the compliance tools that determine which crypto applications are legal and which are not.
This $93 billion is not the value of the infrastructure — it is entirely dependent on the application value of Chainlink’s infrastructure. This infrastructure is Chainlink’s oracle network, data flow, and cross-chain messaging system.
But if Chainlink disappeared tomorrow, how much of that $93 billion would become worthless? How many DeFi protocols would cease to function? How many tokenized assets would lose price data?
The answer is: mostly. This suggests that infrastructure may already be more valuable than applications, even if the market hasn’t realized it yet.
They’ve become systemically important in crypto, a position few protocols have achieved. The network effect is clear: the more institutions use Chainlink, the more other institutions want to use Chainlink because everyone else is already using it.
In crypto, network effects are self-reinforcing when everyone needs the same underlying service. The more institutions use Chainlink, the more others want it because everyone else is already using it. Revenue is sticky because the infrastructure continues to earn fees regardless of which applications succeed or fail. DeFi protocols come and go, but the data layer that powers them all continues to collect fees. Applications are commodities, infrastructure is a monopoly. And monopolies, as we know, tend to capture the majority of an ecosystem's value.
Cracks in the foundation
But let’s be honest about what might go wrong, as Chainlink’s bullish thesis assumes a lot of things that may not always hold true.
The first problem is that oracle networks are technically difficult to build. But the difficulty isn't the software; it's getting everyone to agree to use your version. Chainlink's moat is network effects and first-mover advantage, not some insurmountable technological barrier. Google and Amazon could build competing oracle services tomorrow if they wanted to. So could Microsoft. Any large cloud provider with a good engineering team could.
The second issue is the risk of regulatory capture. Chainlink has become so systemically important that if it fails, large parts of the tokenized financial system will collapse with it. This is exactly the kind of "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 flow of trillions of tokenized assets? Chainlink could suddenly find itself facing regulatory scrutiny that could turn a profitable business into a compliance nightmare.
The third issue is the tokenization hypothesis. Chainlink's entire value proposition relies on traditional finance migrating on-chain at scale. 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 landscape changes, making tokenization harder rather than easier? Chainlink is building infrastructure for a future that may not happen.
The fourth issue is competition from the very people they serve. JPMorgan Chase is using Chainlink now, but they also have thousands of engineers and a multi-billion dollar R&D budget. How long will it take for them to decide to build their own oracle system instead of paying Chainlink forever? This question applies to every major bank and asset manager experimenting with tokenization.
The final question is whether any middleware company can maintain pricing power over the long term. History shows that infrastructure layers tend to commoditize over time. The internet began with expensive dial-up service and eventually became commoditized broadband. Cloud computing began with Amazon's high prices and eventually became a multi-vendor competition on cost. Why should oracle networks be different?
Chainlink is betting that they can maintain network effects and switching costs forever. This is possible, but such bets tend to work until they suddenly don’t.
But for now, this success story looks nothing like the decentralized, disintermediated financial system that cryptocurrency envisioned. Instead, it looks more like the old system with improved APIs. Banks remain banks, regulators remain regulators, and money continues to flow through institutions that governments can control.
Chainlink didn't replace the traditional financial system. They built a translation layer that enabled it to "speak the language of blockchain." Now, as this translation layer becomes indispensable, it remains unclear whether cryptocurrencies are decentralizing finance or simply providing better tools for centralized finance.
