Chainlink (LINK)

Chainlink is a decentralized oracle network that enables blockchain smart contracts to securely access off-chain data feeds, web APIs, and traditional bank payments. It was founded in 2017 by Sergey Nazarov and Steve Ellis.

Smart contracts on their own cannot access data outside the blockchain. Chainlink solves this 'oracle problem' by providing a decentralized network of nodes that retrieve and verify external data before delivering it on-chain.

LINK is the native token of the Chainlink network. It's used to pay node operators for their services and as collateral that can be slashed for providing incorrect data.

Chainlink has become critical infrastructure for DeFi, providing price feeds for lending protocols, DEXs, and derivatives platforms. It also enables other use cases like verifiable randomness, cross-chain communication, and proof of reserve.

Chainlink operates through a network of independent node operators who retrieve data from various sources, aggregate it, and deliver it to smart contracts. This decentralized approach prevents single points of failure and manipulation.

For price feeds, multiple nodes fetch price data from different exchanges and data providers. The data is aggregated to produce a single reliable value that's resistant to manipulation or errors from any single source.

Node operators stake LINK as collateral and earn rewards for providing accurate data. If a node provides incorrect data, its stake can be slashed as a penalty. This economic incentive ensures data quality.

Chainlink also provides other services: VRF (Verifiable Random Function) for provably fair randomness, Keepers for automated smart contract execution, and CCIP (Cross-Chain Interoperability Protocol) for cross-chain messaging.