To the observant cryptocurrency enthusiast, the sight of multiple large-cap tokens more than tripling their value since November 2020 is a healthy sign that a bull market cycle is underway.
Aside from a breakout in the price of Bitcoin (BTC), Ether (ETH) and altcoins, every bull market in the crypto sector is defined by one or two key themes that emerge as the driving force of market enthusiasm. In 2016-2017 there were ICOs, the growing popularity of collectibles like CryptoKitties and the widely held belief that blockchain was a solution to every problem in the world. In 2021 it’s clear... Take a look at the latest crypto news here https://topmagazinewire.com/category/cryptocurrency
Oracle-focused tokens rally as DeFi searches for trusted data providers
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To the observant cryptocurrency enthusiast, the sight of multiple large-cap tokens more than tripling their value since November 2020 is a healthy sign that a bull market cycle is underway.
Aside from a breakout in the price of Bitcoin (BTC), Ether (ETH) and altcoins, every bull market in the crypto sector is defined by one or two key themes that emerge as the driving force of market enthusiasm. In 2016-2017 there were ICOs, the growing popularity of collectibles like CryptoKitties and the widely held belief that blockchain was a solution to every problem in the world. In 2021 it’s clear that DeFi is one of the primary drivers of the current bull trend in Ether price and altcoins that embraced the sector. While it may not be in the forefront of every analyst’s mind, the development of oracles is another component that is quietly building the essential infrastructure of the crypto market and many of the projects focused on oracle integration have seen their token prices surge in the past 12 months. Oracles track, record and securely transmit various forms of data, such as price and trading volume, to different blockchain networks and entities that are interested in the data provided. Companies like the stablecoin provider Paxos, decentralized exchanges like Uniswap and lending platforms like Maker (MKR) utilize oracles such as Chainlink (LINK) to provide accurate cryptocurrency-related information. Total value locked in DeFi. Source: DeFi Llama
The need for trusted and reliable data is growing in importance as DeFi continues to expand and the total value locked reaches record highs at many platforms . DeFi hacks demonstrate the need for oracles
In 2020 multiple DeFi protocols were hacked, costing investors millions of dollars as flaws in unaudited code allowed hackers to have their way with price alterations. These breaches bring light to the essential tasks of oracle providers, which are to provide reliable, up to the second price discovery data for cryptocurrencies. Having this data come from multiple trusted sources decreases the possibility of manipulation and mass liquidation events like the Harvest Finance exploit where hackers made off with $24 million by manipulating the price of stablecoins on the Curve DAO (CRV) platform. Making the pricing and data feeds universally consistent or even synchronized is one of the optimal ways to tackle this issue as currently, every oracle is structured differently in how it sources data, comes to a consensus on that data, and how prices are then calculated. With Bitcoin price continuing to reach for new highs and the DeFi market cap topping $57.45 billion, mainstream investors are becoming much more interested in cryptocurrencies and pricing solutions are needed.
Here are some of the top oracle-focused projects who’s tokens are making strong moves over the past few months. Chainlink has the first-mover advantage
The most well-known and established oracle project is Chainlink. Arising out of the ICO craze of 2017-2018, the Sergey Nazarov-led project initially raised $32 million to develop a decentralized oracle network comprised of node operators who are willing to provide smart contracts with access to external data feeds in return for a reward in the form of the native LINK cryptocurrency. LINK/USDT daily chart. Source: TradingView
LINK became synonymous with DeFi as many of the price feeds that connect separate blockchains and decentralized exchanges utilize its price oracles for price discovery. Similar to the Coinbase effect, there was a period of time when just the mention of being integrated with Chainlink would provide a brief period of price appreciation as it was seen...
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