Santiment, a blockchain analytics firm, shows that Chainlink’s development activity has been rapid since late May 2023. A metric that tracks the continuous enhancement of Chainlink, a blockchain-agnostic platform that links decentralized apps (dapps) to trustworthy external data, shows that activity rose from 1,579 on May 31 to 1,707 by July 27.
Development Activity, LINK Prices Rising
Accompanying the notable uptick in activity was a strong resurgence in the price of LINK, Chainlink’s native currency. Trackers show that after dropping to $4.77 in June 2023, LINK prices soared by 77%, reaching as high as $8.4 in mid-July. As of August 7, LINK is up double-digits, adding 44% from June 2023 lows.
Factoring in rapid on-chain development activity during this period, the spike indicates how developer activity can influence prices or even fuel demand in an uptrend. Like public chains, how developers engage and contribute to improving a dapp is critical for security and general platform enhancements.
A noteworthy shift was also observed in large LINK holders’ behavior, often called “whales.” These holders, owning between 100,000 and 10 million LINK, showed a consistent pattern. Although their market share declined slightly from 26.47% on May 31 to 26.14% on June 9, it rebounded to 26.42% on July 8.
In crypto circles, whales can substantially influence prices due to their substantial holdings, making their activities a gauge of broader confidence in the project. However, a higher whale concentration can be dangerous for projects since they can rapidly dump, impacting the protocol’s valuation.
Chainlink Releases CCIP To Address Cross-Chain Risks
In mid-July, the Chainlink Cross-Chain Interoperability Protocol (CCIP) was launched on the mainnet but remained in development. Chainlink said the CCIP provides a secure interface for dapps and entrepreneurs to conduct cross-chain activities like token transfer and messaging.
The middleware developer notes that cross-chain connections come with inherent risks, advising the development of CCIP. Accordingly, the cross-chain solution focuses on integrating robust security measures. Among them include the Risk Management Network, which detects malicious behavior. The CCIP also introduces off-chain reporting (OCR) protocol. Chainlink says this protocol already safeguards value in most layer-1 blockchains by adding value.
Analysts say CCIP will be a game-changer due to its use cases. Chainlink said CCIP enables integrating protocols to easily lend and borrow different coins across various platforms on various blockchains. This means more flexibility and better access to financial services. Additionally, the tool will reduce transaction costs by making them faster and cheaper.
Feature image from Canva, chart from TradingView