Bank Of America Report Says Chainlink (LINK) Will Drive DeFi Growth

February 18, 2022 4:29 pm Comments

Bank of America recently released a research report that analyzes why Chainlink (LINK) would be the one that would help accelerate blockchain growth in areas like finance, insurance, and gaming.

Currently, Chainlink is known as a decentralized oracle network (DON) that is currently the market leader when measured by total value locked and smart contract deposits.

To give an idea of how fast the ecosystem has been growing, the network currently has $60 billion deposited in smart contracts.

The total value locked (TVL) being measured as $200 billion for the overall industry this year is measured to be an over 300% growth compared to last year and it is likely that Chainlink was one of the primary drivers for the growth of DeFi.

CoinDesk reports:

DeFi is an umbrella term used for lending, trading and other financial activities carried out on a blockchain, without needing to use traditional middlemen.
The adoption and growth of DeFi last year was driven by the “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 said.
As of Feb. 15, Chainlink oracles secured more than $60 billion deposits into smart contracts, up from $7 billion at the end of 2020, the bank said.
The oracle network generated more than 2.5 million verifiably random numbers for non-fungible token (NFT) distribution and gaming, up from almost zero at the end of 2020, the report said.
So far, Bank of America revealed in the report that there are around 1,100 different projects that currently leverage Chainlink’s network.
As Chainlink is a decentralized oracle network, third party entities and companies are able to launch their own oracle nodes on the network in order to monetize their data.
Around 800 different companies have already done this such as AccuWeather, Sportmonks, and the Associated Press which shows that many commercial entities find the data tremendously valuable.
Analysts of the bank have concluded that oracles are most likely going to be one of the hottest use cases within the emerging crypto and blockchain industry that would completely transform industries in the near future.
The major bank has also included within its previous reports about its bullish outlook on the future of the industry.

CryptoPotato reports:

Despite the conflict that banks and crypto are often presumed to have, Bank of America has been remarkably bullish on the space. In an October report, the institution noted that crypto was now “too large to ignore”.

This was a sharp change of attitude from its previous stance in March 2021, where it deemed Bitcoin “too volatile” and impractical as a store of value.

However, the institution appears more interested in the broader crypto ecosystem, and blockchain technology as a whole. “Bitcoin is important, but the digital asset ecosystem is so much more,” reads its October statement.

At the time of writing, Chainlink’s native token LINK is the 22nd largest crypto by market valuation with a total market cap of $7.9 billion.

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