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If you ask people in the crypto space what they think of when you say ‘oracles’, many will likely say “Chainlink”. Chainlink has become the number-one most trusted oracle throughout the crypto space and beyond, boasting partnerships with some of the biggest names in tech and an array of integrations and partnerships with an impressive roster of collaborations.
Specifically, the Chainlink project aims to reinvent how automated financial contracts work and is at the forefront of the fourth industrial revolution. Oracles are the backbone of many DeFi projects and provide the foundation for a multitude of applications.
In this article, we’ll explore how Chainlink works, how the native LINK token works, and why Chainlink has become the oracle of choice for so many cryptocurrency projects and businesses worldwide.
Before you dive into Chainlink, be sure to check out the various blockchain and crypto courses available on Ivan on Tech Academy. Ivan on Tech...
Synthetix is the name of a decentralized, synthetic-asset exchange. “Synthetics,” on the other hand, are financial instruments that simulate other instruments. They play a big role in the world of traditional finance. And this is what the company, Synthetix, aims to bring to the world of decentralized finance (DeFi)
But, before we dig into the role that Synthetix plays in the DeFi space, let’s look at the traditional role that synthetics have always played. We’ll start with derivatives.
A derivative is a security that derives its value from an underlying asset (or group of assets). Futures, swaps, and options are all examples of derivatives. The derivative holds no value in and of itself. Its value is based on its underlying asset(s).
Underlying assets can be things like stocks, bonds, and currencies. Bitcoin could be an underlying asset. Thus Bitcoin’s intrinsic value could drive the price of a derivative.