LINK is the native token of Chainlink, a network of decentralised oracles created by Smart Contract Ltd., which is led by Sergey Nazarov and Steve Ellis. The Chainlink network and LINK token went live on Ethereum's mainnet in June 2019.
Chainlink's token is built on Ethereum and is based on the ERC-20 standard. LINK is also the only token on Ethereum to incorporate the ERC-677 standard, which was created specifically for Chainlink to enable both payment and data retrieval in a single transaction. While the LINK token is based on Ethereum, Chainlink itself is able to deliver data to any platform. LINK is based on Ethereum, but the token can be transferred onto any blockchain platform in the future (if the need arises).
The creation of a new token by Chainlink ensures that the incentives of participants are aligned with the health of the network, since the LINK tokens used as staked collateral would become worthless in the event of an attack. LINK also makes sure that the security of the network does not rely on external factors (e.g., as would be the case if Chainlink used ETH or stablecoins instead of LINK).
LINK offers two main use cases:
- To reward node operators who deliver correct off-chain data to smart contracts, and
- To be staked as collateral by node operators when specified by contract creators to ensure that they report the correct data reliably and accurately. The collateral incentivises ndoe operators to behave in a desirable way from the contract creator's point of view, and malicious or unresponsive nodes will have their collateral slashed.
Chainlink's token was distributed in an Initial Coin Offering during September 2017, raising $32 million in one day. The total supply of LINK is fixed at 1 billion, where 35% of the total supply was sold in the token sale to investors, 35% is directed towards node operators as subsidies and ecosystem rewards, while the remaining 30% was distributed to Smart Contract Chainlink Ltd. as a fund for development.
To learn more about the Chainlink network and the LINK token, check out our coin profile.