Chainlink (LINK) price has increased by more than 25% since September, outperforming Bitcoin (BTC), Ethereum (ETH), and most altcoins. Currently, the project is the leading decentralized blockchain oracle solution, ranking 15th in market capitalization when stablecoins are excluded.
LINK’s price soared an impressive 35.5% in September, but LINK has faced a 10% retracement in October’s performance so far. Investors are concerned that a break above the $7.20 support level could lead to further downward pressure that could wipe out all of last month’s gains.
It’s worth noting that the closing price of $8.21 on September 30 was the highest in more than 10 weeks, but from a larger perspective, Chainlink’s price is still 86% below its all-time high in May 2021. LINK has barely grown over the past 12 months, while Ethereum (ETH) has gained 21.5% over the same period.
LINK Marine Corps pins all hopes on SWIFT experiment
SWIFT, the leader in international financial transaction messaging, released a report titled “Connecting the Blockchain: Overcoming the Fragmentation of Tokenized Assets” on September 31, which shows how to connect existing systems to the blockchain Chains were more feasible than unifying disparate centralized systems, and then the LINK bull market began. Bank Digital Currency (CBDC).
After a series of tests, SWIFT reported that it was able to provide a single access point to multiple networks using existing infrastructure. The system relies on Chainlink’s Cross-Chain Interoperability Protocol (CCIP) and is said to significantly reduce operating costs and challenges for institutions supporting tokenized assets.
Chainlink’s surge in value was also driven in part by Australia and New Zealand Banking Group’s (ANZ) successful testing of its Australian dollar stablecoin using Chainlink’s CCIP solution. In a statement on September 14, ANZ described the deal as a “milestone” moment for the bank. ANZ banking executive Nigel Dobson noted that ANZ sees “real value” in tokenizing real-world assets, a move that could revolutionize the banking industry.
On September 21, Chainlink announced the launch of the CCIP protocol mainnet on the Ethereum second-layer protocol Arbitrum One, aiming to promote the development of cross-chain decentralized applications. This integration provides access to Arbitrum’s high-throughput, low-cost scaling solutions. StarkWare is another well-known Ethereum scaling technology company that has previously used Chainlink’s oracle service.
Chainlink multisig changes and lower protocol fees reduce investor interest
However, the positive news flow was disrupted on September 24 when user @StefanPatatu took to the X social network (formerly Twitter) to call on Chainlink to quietly reduce the number of approvals required for its multi-signature wallets. The previous arrangement required four out of nine signatures to authorize a transaction, seen as a security measure.
Chainlink responded by downplaying these concerns and said the update was part of a regular signatory rotation process. This explanation does not overturn criticism from cryptocurrency analyst Chris Blec that if Chainlink’s signers “went rogue,” “the entire DeFi ecosystem could be deliberately disrupted in the blink of an eye.”
Still, Chainlink’s most important metric, protocol revenue generated by its price feed, measured in LINK, has been declining over the past four months.
In September, Chainlink price feed generated 142,216 LINK fees (equivalent to $920,455), a 57% decrease compared to May. Part of this change can be attributed to the decline in Ethereum’s total value locked (TVL), which has dropped from $28 billion in May to $20 billion currently, a 29% drop. However, this does not explain the entire difference and could lead investors to question the sustainability of Chainlink’s revenue model.
Related: JPMorgan launches tokenization platform, BlackRock among key clients – report
It is worth noting that while Ethereum’s oracle pricing service remains the core of the protocol’s business, Chainlink also provides a range of services beyond price generation and operates on multiple chains, including CCIP.
In comparison, leading decentralized exchange Uniswap (UNI) has a market capitalization of $2.38 billion, 42% lower than Chainlink. Uniswap also has $3 billion in total value locked (TVL) and generated $22.8 million in fees in September alone, according to DefiLlama.
Therefore, investors have reason to question LINK’s ability to maintain support at $7.20 and maintain its market cap of $4.1 billion.
This article is for general information purposes only and is not intended to be, and should not be construed as, legal or investment advice. The views, thoughts, and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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