With the successful completion of the first Kusama parachain slot auction, connecting parachains with the Kusama relay chain, the Polkadot project has achieved the final core functionality outlined in its whitepaper.
What are Chainlink and Polkadot ?
Chainlink, funded in 2017, is an Oracle-based network created to facilitate smart contracts. It allows developers to bridge any blockchain with real-world data. Chainlink was developed on the Ethereum blockchain.
Polkadot and Chainlink each have a native token, known as DOT and LINK, respectively. LINK is an ERC-20 token that follows the same technical standard as Ethereum. DOT, the native token of the Polkadot platform, is used for the platform’s governance, staking and bonding parachains.
DOT and LINK have both enjoyed a positive change in their respective prices against USD from 1 January to the beginning of July 2021, surging 61,87% and $62.07 respectively.
How do Polkadot and Chainlink work?
Marcus de Maria, founder and CEO of Investment Mastery, explained the underlying principle of both Polkadot and Chainlink projects. They share a common objective to facilitate blockchain interoperability and interaction.
According to de Maria, the blockchain space is yet to expand hugely in the coming months and in the long-term. Due to this growth potential, the market is large enough to accommodate several players.
Interoperability is a crucial requirement for the market to grow faster. Polkadot and Chainlink can play important roles.
Despite having a similar objective, Polkadot and Chainlink operate differently. To address the blockchain’s scalability problem, Polkadot enables a seamless flow of information between parachains. Chainlink, on the other hand, enables blockchains to communicate with a range of external data sets and payment procedures while maintaining confidentiality.
Advantages & disadvantages of Polkadot vs Chainlink
One of the major advantages of Polkadot is its extremely vibrant ecosystem. New projects are announced on the Polkadot platform almost every week. As of 6 July 2021, the total number of Polkadots projects stood at 468.
According to CryptoEQ, the project has numerous strength points:
Developers build chains and applications for the framework with a shared security model, which eliminates the problem of attracting enough validators and miners to secure the chains.
Polkadot’s Substrate modular framework provides developers with the flexibility to choose particular components which best fit their app-specific chain.
Parachains of Polkadot enable the use of bridges to interconnect with other networks, for example, ethereum and bitcoin.
Polkadot gains popularity among institutional investors.
According to Keld van Schreven, the founder of the leading European blockchain and digital-asset venture-capital firms KR1:
Polkadot is integrating with other networks, including Chainlink. The integration enable various smart-contract apps across the Polkadot network to get up-to-date, accurate and tamper-proof price reference data for powering new products.
Polkadot has a lot of rivals, including other proof-of-stake blockchain networks such as Cardano, Tezos and Cosmos.
The number of available parachains is limited and slots are distributed via auction, which could be not suitable for all use cases.
One of Chainlink’s strong points comes from its partnerships with large companies. For example, Chainlink developers worked with SmartContract, which has served the contract automation industry since 2014. Chainlink has partnership agreements with Google Cloud, SWIFT and other blockchains, like Polkadot and Binance.
According to CryptoEQ, Chainlink has several major advantages:
Chainlink’s oracles allow building bridges between blockchains and off-chain data sources. According to the company’s corporate blog:
The platform offers seamless connection to any API, which means Chainlink can work with any blockchain. It opens many integration opportunities.
Around 60% of Chainlink supply is controlled by its parent company.
The number of oracles in the Chainlink’s network is still limited. As of 6 July 2021, there were 250 active oracles available on the platform.
News and highlights of Chainlink and Polkadot
On 16 June 2021, Chainlink announced registration for the Summer 2021 Smart Contract Developer Bootcamp, offering free blockchain developer training for building Ethereum-based Solidity smart contracts.
Chainlink Labs, the company that owns and operates Chainlink, has been ranked as the number one company by FlexJobs when it comes to hiring employees for remote working. The announcement from FlexJobs came on 25 June 2021.
On 29 June 2021, Revolut, a UK-based fintech company with more than 15 million users, announced a partnership with Polkadot, which allows the DOT token to be listed on its app.
Coinbase, a popular cryptocurrency trading platform, made Polkadot available on its platform from 17 June 2021. The Coinbase blog notes: “Polkadot (DOT) is available on Coinbase.com and in the Coinbase Android and iOS apps. Coinbase customers can now trade, send, receive, or store DOT in Coinbase-supported regions, with the exception of Singapore.”
Technical analysis: is Polkadot better than Chainlink?
According to CoinMarketCap, the current price of DOT is $15.45 (as of 6 July), with a market capitalisation of $14.7bn and a total supply of 1.01 billion tokens.
The monthly moving averages, according to investing.com, provides 8 buy and four sell signals for DOT. Moreover, a summary of technical indicators suggests three buy recommendations with two sell signals.
Polkadot also enjoyed a sharp rise during the first half of June 2021, when news of its parachain auction hit the crypto community. Keith Bliss, president of Capital2Market, said in an interview with Business Insider that DOT could achieve astonishing growth of more than 500% within the next three years. This positive news helped DOT rise to $49.69 on 15 May 2021, up from $29.73 on 25 April 2021.
On the other hand, LINK is trading at $19.26 (as of 6 July), with a total market capitalisation of around $8.4bn and a total supply of 1 billion tokens, according to CoinMarketCap. The current price is 17% higher than the 30-day low of $15.26 and 44% lower than the 30-day high of $32.64.
Investing.com provides a bullish monthly sentiment for LINK, with eight buy and four sell signals, according to moving averages analysis. The summary of technical indicators suggests a sell recommendation, with four sell signals and three buy signals.
Right before the release of the Chainlink 2.0 whitepaper on 15 April 2021, LINK skyrocketed from $31.3 on 4 April 2021 to $43.38 on 15 April 2021. Encouraging news, along with Chainlink’s recent integrations, may lead to a positive outlook for investors in the coming months.
Polkadot & Chainlink price forecast 2021-2025
Algorithm-based price forecasting platforms, such as Wallet Investor, DigitalCoin, and TradingBeasts, are bullish on the price trends of DOT and LINK from 2021 to 2025. However, the trend is more bullish for DOT than LINK in all three cases.
According to DigitalCoin, the price of DOT will increase by 203% by December 2025, and the price of LINK by 195%.
These price forecasts are based on current demand and supply, and forecasting algorithms cannot foresee market volatility and collapses. It is critical to conduct your own research and not rely on price projections.
According to Katherine Wooler, managing director of Dacxi, investors who look for “clean crypto” will like both DOT and LINK due to their future prospects and growth potentials.
Polkadot vs Chainlink vs Uniswap
Another player to watch in the DeFi space is Uniswap. Developed by Hayden Adams, Uniswap is a DeFi protocol, which aims to facilitate the exchange of cryptocurrencies in an automated way by using smart contracts. It’s gained more than 300% over the last 6 months, currently trading at $21.62 (as of 6 July 2021), according to CoinMarktCap.
Should you invest in Polkadot or Chainlink?
The cryptocurrency market looks to be slightly optimistic based on recent price movements. Bitcoin (BTC) and other cryptocurrencies, such as ether (ETH) and Cardano (ADA), have recovered after a month of losses. However, any significant sell-off incident might lead prices to fall. When it comes to cryptocurrencies, it’s wise to proceed with caution.
Contracts for difference (CFDs) allow you to speculate on the price volatility of Polkadot (DOT) and Chainlink (LINK). CFDs enable you to go long or short without actually holding any coins. For example, if you believe the price will climb, you can go long. You can go short, if you think the price will fall. You can profit from any price change, whether positive or negative.