What is Chainlink? A trader's guide

Learn all about Chainlink and the LINK price history, how it works, and how to trade LINK/USD via CFDs.

What is Chainlink?

Chainlink is an open-source, decentralised blockchain oracle network co-founded by Sergey Nazarov and Steve Ellis, with technical contributions from Ari Juels. Launched in 2019, it bridges blockchain systems and real-world data by providing tamper-proof external data to smart contracts via oracles.

Chainlink’s oracles connect blockchains to off-chain systems, such as APIs, data feeds, and financial infrastructure, enhancing the functionality and security of decentralised applications (dApps). Key innovations include the Cross-Chain Interoperability Protocol (CCIP) for seamless blockchain communication and real-time data support for dApps.

Its native cryptocurrency, LINK, incentivises node operators to provide secure data and serves as a payment method for network services.

As of January 2025, LINK ranks among the 15 largest cryptocurrencies by market capitalisation on CoinMarketCap.

How does Chainlink work?

Chainlink is a decentralised oracle network designed to connect blockchain systems with real-world data, ensuring smart contracts can access reliable, tamper-proof information. At its core, Chainlink bridges the gap between on-chain and off-chain environments through oracles – entities that fetch, aggregate, and transmit external data to blockchains.

The process begins when a smart contract on a blockchain requests specific off-chain data. Chainlink's system matches this request with suitable oracles from its decentralised network. These oracles retrieve the required data using various external sources to ensure accuracy, aggregating responses and eliminating discrepancies through a consensus mechanism.

Chainlink launched its staking feature in December 2022, designed to maintain security and trust by allowing node operators to stake LINK as collateral to align incentives and guarantee honest behaviour. If a node provides inaccurate data or fails to deliver, it risks losing its stake, aligning incentives to ensure reliable performance.

Chainlink’s architecture provides options for scalability and adaptability. For example, its Cross-Chain Interoperability Protocol (CCIP) enables seamless communication across multiple blockchains, expanding the network’s potential applications. Additionally, Chainlink enables advanced use cases like real-time market data feeds for decentralised finance (DeFi) platforms and supports verifiable randomness through its VRF service for gaming applications.

By decentralising the oracle process, Chainlink mitigates the risks of a single point of failure, ensuring that smart contracts can interact securely and reliably with the outside world. This robust infrastructure continues to position Chainlink as a vital component of the blockchain ecosystem.

How Chainlink works, from staking to core functionality

What is LINK’s price history?

The LINK price was $0.11 at the time of its September 2017 initial coin offering, which raised approximately $32 million. The early years of the token were marked by relatively subdued activity, trading below $1 for much of Q1 2018 before starting to rise in Q2 2018. This uptick was influenced by a surge in interest following major announcements, including Chainlink’s integration with Alphabet (GOOGL)’s Google Cloud and other strategic partnerships, showcasing the potential of its oracle technology.

Adoption of Chainlink’s oracle services surged during the 2020 DeFi (decentralised finance) boom, which helped to propel LINK to a yearly high in August 2020. This was influenced by growing interest in smart contracts and DeFi, as well as Chainlink’s partnerships with high-profile blockchain projects, such as Aave (AAVE) in January 2020 and Tezos (XTZ) in April 2020.

LINK's momentum continued, peaking at $52.88 on 10 May 2021, fuelled by a broader cryptocurrency bull market, a partnership with Polkadot (DOT) announced in April 2021, and increasing adoption of DeFi and NFT platforms. But by mid-2021, regulatory concerns and a market-wide correction caused LINK’s price to decrease significantly alongside other cryptos. Its price dropped to around $15 by year-end, highlighting how macroeconomic conditions and shifts in trading sentiment can affect altcoins such as LINK.

The bear market of 2022 proved particularly challenging for LINK. Its price hovered in the $5-$7 range for much of the year, impacted by broader economic concerns, including inflation and rising interest rates. Negative media coverage surrounding the overall crypto market, including the collapse of major platforms like FTX, which dampened enthusiasm for many digital assets. Despite these challenges, Chainlink continued to strengthen its ecosystem by introducing features like staking to incentivise community participation and enhance network security.

By 2023, LINK’s price started to rise again. The rollout of Chainlink’s Cross-Chain Interoperability Protocol (CCIP) and the growing adoption of its oracle services across traditional finance and blockchain platforms helped restore confidence. Media reports highlighting Chainlink’s increasing utility in bridging Web3 and Web2 systems further supported this resurgence, alongside the integration of over 1,500 project partnerships.

In late 2023 and early 2024, Chainlink adopted strategic tokenomics updates, focusing on staking rewards and reducing circulating supply. Positive media coverage around these innovations and renewed interest in decentralised technologies contributed to this growth.

Which factors might influence the LINK live price?

Various factors have the potential to shift LINK’s live price in either direction, including market sentiment, broader cryptocurrency market trends, and Chainlink ecosystem developments.

Here are some of the key factors that might move the LINK price:

Adoption of Chainlink’s oracle services

Widespread adoption of Chainlink’s oracle services can significantly influence the LINK price. Increased demand for Chainlink from decentralised finance (DeFi) platforms, enterprises, or merging blockchain projects tends to boost demand for LINK, as it’s used to pay for data feeds and incentivise node operators. For example, the introduction of partnerships with major platforms or blockchain projects often sparks positive sentiment and price growth.

Conversely, slower adoption rates or competition from other oracle networks could hinder demand, potentially lowering LINK’s price.

Technological advancements and network upgrades

The rollout of new features or enhancements to Chainlink’s ecosystem has the potential to influence LINK’s price. For instance, innovations like the Cross-Chain Interoperability Protocol (CCIP) may expand Chainlink’s functionality, attracting more developers and projects, potentially contributing to price increases.

However, delays in planned upgrades or technical issues may negatively impact market confidence, potentially putting downward pressure on LINK’s price.

Broader cryptocurrency market trends

As with many cryptocurrencies, LINK’s price often moves in tandem with the wider market. Bullish conditions, typically driven by rising bitcoin (BTC) and ethereum (ETH) prices, can create positive momentum for LINK.

Similarly, bearish trends or market-wide corrections, often prompted by regulatory news or macroeconomic shifts, may lead to declines in LINK’s price. For example, during the 2022 crypto bear market, LINK struggled to maintain price stability despite ongoing ecosystem growth.

Regulatory developments and sentiment

Regulatory updates can have a profound impact on LINK’s price. Positive news, such as regulatory approval for blockchain projects or recognition of Chainlink’s role in bridging Web3 and Web2 systems, may enhance market sentiment and potentially influence LINK’s price to rise.

Conversely, restrictive regulations or uncertainties surrounding cryptocurrency policies may dampen enthusiasm and contribute to sell-offs, adversely affecting LINK’s live price.

What are the LINK trading hours?

LINK operates on a decentralised blockchain network that is active 24 hours a day, seven days a week. This means you can trade LINK at any time, including weekends and holidays.

Cryptocurrency exchanges – many exchanges facilitate 24/7 trading, allowing for continuous market participation.
Online trading platforms – some reliable and trusted brokerages provide LINK trading via CFDs.

If you choose to trade CFDs, you can follow the LINK performance live in US dollars with our comprehensive LINK/USD price chart.

Monitoring the cryptocurrency’s activity can help you to keep an eye out for any key fundamental or technical events that may affect short-term movements in its value.

How to trade LINK

As a cryptocurrency, LINK can be traded directly on a cryptocurrency exchange or through peer-to-peer transactions. Traders may also choose to trade LINK via a derivative, a financial product that takes (or ‘derives’) its value from the price of the underlying asset.

You could use a contract for difference, or CFD, to trade on the price of LINK pairs. A CFD is a contract, typically between a broker and a trader, where one party agrees to pay the other the difference in the value of a security, between the opening and closing of the trade.

You can use CFDs to trade on whether you think an LINK pair will rise (called ‘going long’) or fall (‘going short’). CFDs give you access to leverage, allowing larger positions with a relatively small outlay. This amplifies your potential profits, but also your potential losses, making CFD trading risky.

You can learn more about trading cryptocurrencies with Capital.com in our comprehensive guide to cryptocurrency trading.

Aside from CFDs, you can also trade cryptocurrencies through instruments like futures, options, and ETFs. Each offers an alternative to the leveraged trading of CFDs, suiting different risk profiles and strategies.

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FAQ

What is Chainlink?

Chainlink is an open-source, decentralised oracle network designed to bridge blockchain technology with real-world data. First announced in 2017 and with its mainnet launched in 2019, Chainlink ensures that smart contracts on blockchains can securely access reliable, tamper-proof external information.

Who owns the most LINK?

The ownership distribution of LINK, Chainlink’s native cryptocurrency, is not entirely transparent due to the pseudonymous nature of blockchain wallets. However, according to 2020 data, more than 80% of LINK not held on exchanges was controlled by 125 wallets, indicating a high level of token concentration among a small number of holders.

Significant portions of LINK are likely held by the Chainlink team, early adopters, and institutional participants. Wallets associated with Chainlink Labs, the core developer of the network, may also hold a large share, ensuring development and operational funding.

What makes Chainlink unique?

Chainlink’s decentralised oracle network sets it apart. By connecting blockchains with off-chain data sources like APIs, financial systems, and IoT devices, it enables smart contracts to execute more complex and secure functions. This versatility has made Chainlink widely adopted in many decentralised finance (DeFi) platforms and blockchain-based applications

Is LINK a good trade?

As with any cryptocurrency, LINK’s price is subject to market volatility, adoption trends, and technological advancements. While Chainlink's integration into various blockchain ecosystems highlights its potential, prospective traders should carefully consider market risks, project developments, and their own financial goals before trading.