#BSCProjectSpotlight The Chainlink project is a decentralized network that provides oracles to connect live data from the external world with smart contracts on the blockchain network. Smart contracts are programs that run on the blockchain and interact with data and other systems, but they cannot directly access information existing outside the blockchain (such as live prices or data from websites). This is the role of oracles.
What is the function of oracles?
Oracles are a means to enable smart contracts to obtain external data from reliable sources. This data can be currency prices, sports events, or any information from the real world.
Chainlink operates as a decentralized network of oracles, providing a reliable and secure data source that ensures the accuracy of the information reaching smart contracts.
Why is Chainlink important?
1. Expansion of decentralized applications (DApps): Many decentralized applications rely on external data (such as live prices of commodities or currencies), and Chainlink ensures this data is provided accurately and securely.
2. Integration with DeFi: In the world of decentralized finance (DeFi), many protocols rely on live data from oracles to execute transactions (such as determining prices or calculating yields). Chainlink is one of the most reliable solutions in this field.
3. Security and reliability: In the dominance of blockchain, security is a critical point. Chainlink provides a decentralized system so that data is verified by many participants to ensure its accuracy.
How does Chainlink work?
1. Demand for data: When a smart contract needs external data, it sends a request to the Chainlink network.
2. Sending the request to the oracles: Chainlink sends the request to a group of different oracles (nodes), which obtain the required data.
3. Data gathering: Oracles collect data from their sources and return it to the smart contract after verifying it.
4. Execution: After obtaining the accurate data, the smart contract can execute actions based on this data.
Uses of Chainlink:
Decentralized finance (DeFi): Such as lending or trading protocols that rely on live prices.
Insurance: Providing live data to verify certain events (such as weather or accidents) for settling claims.
Games: Providing live data such as sports results or events to change how the game proceeds.
In summary, Chainlink is an important solution that fills the gap between blockchain and the external world, contributing to enhancing the security of decentralized applications and expanding their use.
