Link token is
The utility token for Chainlink oracle network.
- An ERC-20 token with ERC223 functionality.
- Being developed to integrate with Polkadot.
LINK token is used for
- Pay node operators for data feeds.
- Bid on off-chain data queries.
How does the LINK token work?
- Smart contracts need to pay their chosen ChainLink Node Operator using LINK tokens.
- Prices are set by the node operator based on demand and supply for the off-chain resource.
What is Chainlink?
Chainlink is a decentralized oracle technology that allows off-chain data to be connected to any chain.
How Chainlink works
To provide reliable oracles Chainlink uses (p.16):
- a Validation System
- a Reputation System
- a Certification Service
- a Contract-Upgrade Service to provide security.
For node operators
- To increase decentralization ChainLink proposes aggregation of off-chain data.
- To mitigate risks Sybil attacks and mirroring (p.19), ChainLink proposes trusted hardware and off-chain audits among others things long-term.
Off-Chain Queries (p.5-6)
- An oracle services purchaser specifies requirements such as query parameters, the number of oracles, the reputation and aggregating contracts needed.
- When an oracle service provider bids on a contract, they commit to it by attaching the penalty amount that would be lost due to their misbehavior, Bids are accepted for the entirety of the bidding window.
- Once the SLA has received enough qualified bids and the bidding window has ended, the requested number of oracles is selected from the pool of bids. Penalty payments that were offered during the bidding process are returned to oracles who were not selected.
Whitepaper / Docs
Total supply: 1 000 000 000