BofA: Chainlink To Drive Blockchain Mainstream Adoption
A recent report from Bank of America suggests that Chainlink (LINK) will drive blockchain adoption across the gaming, gambling, and insurance industries, among others.
According to a Bank of America (BofA) research report, Chainlink is currently a likely driver behind growing total value locked in decentralized finance (DeFi). DeFiLlama data shows that there is now over $205 billion locked in DeFi, representing over 300% growth year over year.
Decentralized finance or DeFi refers to the provision of financial services such as insurance, borrowing, and lending through blockchain-based smart contract systems, rather than through traditional centralized systems like banks. Ethereum – the underlying technology on which Chainlink is built – is currently the leading blockchain for DeFi, holding $121 billion total value locked (TVL).
Chainlink is a blockchain “oracle” – a system that connects on-chain and off-chain data. These allow smart contracts to execute based on inputs from the real world as well, rather than just blockchain-native variables. It grew massively last year, scaling up from just $7 billion in TVL at the end of 2020.
The BofA report lists Chainlink’s features for DeFi growth:
“[…] ability for hybrid smart contracts, or self-executing and tamper-proof digital agreements, to verifiably and securely access real-world data through oracle nodes like market prices, time of day, weather and GPS location.”
The report also notes that oracles “enable the next generation of blockchain use cases,” and could “disrupt major industries.”
Large companies such as the Associated Press and AccuWeather are now using Chainlink, monetizing their data by providing it to smart contract developers. There are currently over 1100 projects live on the network.
At the time of writing, the blockchain’s native token LINK is ranked as the 22nd most valuable cryptocurrency by market cap, totaling around $7.3 billion. In September last year, the network partnered with Cardano to integrate oracle data into the latter’s smart contracts.
Bank Of America and Crypto
Unlike many other banks, Bank of America has been quite bullish on crypto. In an October report, the institution wrote that crypto was “most exciting new market in years”. Back in March 2021, the bank was still viewing crypto as “too volatile” and impractical as a store of value.
It seems that the bank is more interested in the broader crypto ecosystem, and blockchain technology as a whole. It wrote in the October report:
“Despite rapid growth and market values on par with some of the largest public companies in the world, we believe the digital asset ecosystem is only getting started.
We are beginning the long journey of covering what we believe to be the next generation of technology—blockchain-based digital assets and applications.”
