Chainlink’s link token is outperforming bitcoin by leaps and bounds as the oracle network’s various use cases garners investor attention, leading to a self-feeding bullish cycle.
Link rose by 31 percent in the first quarter and was trading near $3.20 at press time, representing a 42 percent month-to-date (MTD) increase, according to data source Messari.
The cryptocurrency was registering a bigger MTD price gain of 62 percent over the weekend, when it was trading at a one-month high of $3.66.
While the 14th largest cryptocurrency is extending its Q1 ascent, bitcoin, the top cryptocurrency, has eked out just 5 percent gains so far this month, having shed 10 percent of its value in the first quarter.
This being the cryptocurrency market, hype has played a role in the run-up.
“Link has a strong fan base that constantly promotes or ‘shills’ the project to potential buyers. This often creates a positive reinforcement cycle, further driving up the price,” Connor Abendschein, crypto research analyst at Digital Assets Data, told CoinDesk.
But recently Chainlink has given those promoters something to talk about: its association with a new project called the Baseline Protocol and partnerships in the decentralized finance (DeFi) space, which have generated hype for the project.
Chainlink is a system of oracles built on top of the Ethereum blockchain. An oracle is a third-party information source that supplies data to blockchains. If someone buys insurance against an earthquake or hurricane, for example, an oracle would tell the smart contract when such a disaster occurs so it can pay the policyholder. The link token, in turn, is used to pay Chainlink node operators for providing these services.
The Baseline Protocol, formed by EY and Consensys in collaboration with Microsoft in March, is an open source…