Chainlink 2021 Year in Review: Seven Pillars Driving Growth

In 2021, the Chainlink ecosystem experienced robust growth, with the application volume of core services continuously rising, enhancing the capabilities of hybrid smart contracts in the blockchain economy. Here, we would like to thank all developers, researchers, contributors, data providers, node operators, and community members. Thank you for witnessing such an extraordinary year with us.

This article outlines the seven key pillars that accelerated the adoption of the Chainlink network, such as the record high Total Value Secured (TVS), the widespread use of Chainlink Data Feeds, the launch of off-chain computation services, and a significant increase in the number of integrated projects.

1. Chainlink's Total Value Secured (TVS) Exceeds $75 Billion

At the beginning of 2021, the Chainlink network secured $7 billion in value for the blockchain ecosystem. Twelve months later, the value secured by Chainlink oracles exceeded $75 billion, marking significant growth. This also made Chainlink the second highest decentralized consensus in terms of secured value within the DeFi ecosystem.

The growth of TVS is attributed not only to the increased security and reliability of the Chainlink oracle network but also to the vast variety of data types that on-chain applications can access, thus ensuring the safety of user funds.

In fact, over 700 decentralized oracle networks have been officially launched, providing data across numerous independent blockchains. The most demanded datasets for DeFi applications include financial market prices for crypto assets, stablecoins, forex trading pairs, commodities, and indices, known as Price Feeds.

Additionally, over the past year, Chainlink oracles have broadened the scope of on-chain data, introducing Proof of Reserves, Proof of Supply, Ethereum gas prices, total market capitalization, total value locked in DeFi, sports event results, election outcomes, identity verification data, regulatory metrics, and weather forecasts. New data on-chain has created an increasing number of hybrid smart contract use cases to further secure on-chain value.

2. The Number of Chainlink Ecosystem Projects Surpasses 1,000

The number of hybrid smart contracts integrated with Chainlink oracles has reached unprecedented levels. Currently, the number of projects in the Chainlink ecosystem has exceeded 1,000, with more than half of these projects integrated in 2021.

Chainlink has transmitted over 1 billion data points for these integrated applications to date. Each data point is sourced, verified, and sent on-chain by independent Chainlink oracle nodes that are resistant to Sybil attacks.

Chainlink has achieved explosive growth in both project integration and data volume, currently covering numerous mainstream DeFi vertical application scenarios and securing high-value assets.

According to DeFi Llama data, applications that have integrated Chainlink oracles currently lead in TVL across various DeFi use cases. Chainlink also secures value for various innovative DeFi applications, such as algorithmic stablecoins, DEXs, prediction markets, payment networks, insurance platforms, and asset management protocols.

Beyond DeFi, this year Chainlink has also been increasingly used to provide verifiable random numbers for non-fungible tokens (NFTs) and blockchain games, ensuring unpredictability and fairness.

Millions of NFTs have been generated or issued through Chainlink, effectively driving the development of the on-chain NFT economy. Additionally, public utility projects like Arbol have integrated Chainlink oracles to obtain weather data, settling parametric crop insurance agreements with a total risk coverage exceeding $1 billion.

3. Chainlink Provided Over 2.5 Million Secure Off-Chain Computation Services

As described in the Chainlink 2.0 whitepaper, the role of the decentralized oracle network (DON) is to rapidly enrich the types of services offered, launching services beyond data transmission, and achieving secure off-chain computation, ultimately enhancing and expanding the functionality of smart contract applications. To realize this vision, Chainlink launched multiple services in 2021, providing secure, trust-minimized off-chain computation services for various blockchains.

Chainlink VRF was first launched on Ethereum at the end of 2020, providing a secure source of on-chain randomness for smart contracts. NFTs and blockchain games often require random number inputs to ensure unpredictable and fair gaming experiences. In 2021, Chainlink VRF integrated with blockchains such as Binance Smart Chain (BSC) and Polygon, promoting the development of a multi-chain ecosystem.

The usage of Chainlink VRF surged, successfully receiving and completing over 2.5 million on-chain random number requests. This has made Chainlink VRF the most representative on-chain RNG solution.

To further support off-chain computation, we launched Chainlink Keepers in 2021, providing developers with decentralized transaction automation solutions. Developers can delegate DevOps tasks to Chainlink Keepers for execution, simplifying processes and efficiently and reliably completing tasks.

Chainlink Keepers were initially launched on Ethereum and later expanded to Polygon and BSC, automatically triggering a series of critical smart contract functions, such as liquidating under-collateralized loans, rebase elastic supply tokens, and aggregating yields.

In 2021, Chainlink Price Feeds also upgraded to the Off-Chain Reporting (OCR) protocol. Oracle nodes can aggregate real-world data off-chain and send verified oracle reports to the blockchain in a single transaction.

The cost of updating on-chain Price Feeds decreased by 90%, and the volume of data transmitted to the blockchain increased tenfold. This update further enhanced the decentralization level of Chainlink Price Feeds and improved the tamper-resistance and reliability of on-chain updates.

4. Chainlink Integrated into Various Blockchains and L2s, Promoting Multi-Chain Ecosystem Development

Chainlink is compatible with any blockchain and is continuously expanding, integrating more blockchain environments through the Chainlink Community Grant Program. In 2021, Chainlink integrated with numerous leading L1 blockchains and L2 scaling solutions, including Arbitrum, Avalanche, Binance Smart Chain, Ethereum, Fantom, Harmony, Heco, Moonriver, Optimism, Polygon, Starkware, and xDai.

Given that many smart contract use cases require oracle integration, deploying Chainlink to new blockchain environments will provide on-chain developers with the critical infrastructure needed to develop applications.

One example is the launch of Chainlink Price Feeds on Avalanche. With a secure market data source on the Avalanche blockchain, development teams such as Aave, Benqi, Everest, Maximus Farm, Teddy Cash, Trader Joe, Vee Finance, and xDollar can deploy applications on it.

This has enabled a series of applications such as lending markets, options, yield farming, and stablecoins. Chainlink oracles accelerated Avalanche's development, with its total value locked increasing 88 times within five months of integration.

Moreover, after integrating Chainlink oracles into other blockchain networks, the number of DeFi applications within their respective on-chain ecosystems also experienced remarkable growth. Various projects on the Fantom network, such as Ftm Bet, Ola Finance, SCREAM, SpiritSwap, and Syfinance, have integrated Chainlink, effectively driving the ecosystem forward.

After the release of Chainlink Price Feeds on the Solana testnet, projects like Marinade Finance, Nextverse, Phantasia, Saber, Seeded, Synthetify, and Tupip Protocol are actively integrating Chainlink to enhance the security and reliability of their protocols and provide an exceptional user experience.

5. Open Source Developers Utilize Chainlink to Create Innovative Smart Contract Use Cases

To support the smart contract developer ecosystem, Chainlink hosted multiple community events aimed at the entire Chainlink ecosystem, providing developers with opportunities to collaborate with creators, artists, and top industry mentors to build the next generation of smart contract applications. The Chainlink Spring 2021 Hackathon ran from March to April, attracting over 4,000 registrations, 140+ project submissions, and participants from over 170 countries.

The Chainlink community incentive program and sponsors contributed a total of $130,000 to reward top hybrid smart contract development teams. Awards covered various verticals of smart contracts, including DeFi, NFTs/gaming, social impact, and government technology.

In August 2021, over 15,000 participants from more than 140 countries attended Smart Contract Summit #1. Whether providing a fast track for developers or conducting cutting-edge research on fair transaction ordering, SmartCon #1 showcased the enormous wave of innovation in the blockchain industry.

The conference attracted over 200 top founders, researchers, and developers in the industry to discuss key innovations and collaboration points within the smart contract ecosystem.

The Chainlink Fall 2021 Hackathon ran from October to December, building on the success of the previous spring hackathon, attracting over 7,500 registrations, 280+ project submissions, and inviting a series of top industry judges and mentors to participate.

The Chainlink community incentive program and sponsors contributed a total of $600,000 to incentivize developers to create innovative hybrid smart contract applications. Sponsors included top projects and companies such as Aurora, Avalanche, ConsenSys, Ernst & Young, Filecoin, Google Cloud, Harmony, Moralis, Polygon, Solana, Sushi, and UNESCO.

In addition to hackathon events, the development work of SmartContract GitHub has also been continuously advanced. In 2021, over 180 open-source community contributors initiated more than 3,300 public pull requests.

Multiple independent development teams have contributed to the ecosystem, including Chainlink Labs, LinkPool, LinkRiver, Oracle Reputation, and Fiews. These development teams have worked together to make significant progress in Chainlink's core clients, external adapters, decentralized services, and infrastructure. Additionally, over 4,000 third-party GitHub code repositories referenced Chainlink oracles.

6. Major Global Enterprises Begin to Use Chainlink as an Entry Point into the Blockchain Economy

The Chainlink ecosystem includes various participants, such as developers, contributors, users, data providers, node operators, infrastructure providers, and community members. In 2021, many top enterprises joined the Chainlink ecosystem, supporting or launching Chainlink oracle nodes to further promote the development of the hybrid smart contract economy in the multi-chain ecosystem. Here are some examples of enterprise integrations and collaborations:

The world's largest news organization, The Associated Press, announced the official launch of Chainlink oracle nodes, publishing trusted economic, sports, and election datasets to major mainstream blockchains. The Associated Press will cryptographically sign the data it publishes, allowing developers to independently verify that this data comes directly from the Associated Press and create entirely innovative smart contract use cases.

Global leading weather and media company AccuWeather launched a Chainlink node to transmit its premium paid weather data to various smart contract applications on the blockchain. After integrating Chainlink, AccuWeather can sell paid weather data to emerging markets and support the development of next-generation weather smart contract applications.

AWS announced a partnership with Chainlink to launch AWS Chainlink Quickstart. This is a one-click workflow for enterprises, data providers, and DevOps teams, allowing them to easily deploy Chainlink oracles on AWS and sell real-world data to various blockchain networks. This tool lowers the barrier to securely deploying Chainlink oracles, enabling more data to be sent on-chain.

Google Cloud demonstrated how to use the newly deployed Chainlink oracles to send weather data from the National Oceanic and Atmospheric Administration (NOAA) on Google Cloud to smart contract applications on the blockchain. This can create crop insurance smart contracts and automatically settle using high-quality weather data.

Switzerland's leading telecommunications provider, Swisscom, joined the Chainlink network as a node operator and began providing premium paid financial market data for DeFi applications. The entry of enterprises like Swisscom into the Chainlink network significantly enhances the security and decentralization of Chainlink services.

7. Cross-Chain Interoperability Will Unlock Huge Value for Global DeFi and Traditional Finance

As the smart contract economy continues to evolve, the Chainlink network will keep expanding, providing developers with secure infrastructure to drive decentralized applications forward. The development and application of smart contracts are moving towards a multi-chain direction, gradually covering various independent blockchains, making the development of cross-chain solutions imperative.

To address this demand, we are actively developing the Cross-Chain Interoperability Protocol (CCIP). This is a global open-source standard for securely implementing cross-chain communication.

CCIP provides smart contract developers with a general infrastructure with computational capabilities, enabling the transmission of data and smart contract instructions across public and private chains. Leading CeFi platform Celsius announced it will use CCIP to aggregate yields across multiple blockchains. Celsius has assets under management of up to $26 billion and has 1 million users.

The services in the Chainlink ecosystem continue to diversify, including Price Feeds, verifiable random functions, Keepers, and CCIP. Our ultimate goal is to create a fact-based operating world, which will disrupt the current "just trust us" paper promises and fundamentally address the pain points of traditional centralized contracts.

The World Economic Forum estimated in its 2021 report that blockchain technology could bring $8.66 trillion in value to traditional markets, indicating a massive economic opportunity.

To achieve this goal, numerous industry leaders have joined Chainlink as advisors, including former Google CEO and Executive Chairman Eric Schmidt, former LinkedIn CEO and current Executive Chairman Jeff Weiner, former Twilio CMO Lynda Smith, and former Coinbase CTO and Andreessen Horowitz General Partner Balaji Srinivasan.

In summary, over the past year, the Chainlink ecosystem has experienced explosive growth. Chainlink's TVS exceeded $75 billion, the number of projects in the ecosystem surpassed 1,000, new services were launched, and enterprise applications are rapidly advancing. We look forward to continuing to provide developers with the necessary off-chain infrastructure in the new year to better drive innovation and development in decentralized applications.