Chainlink founder Sergey Nazarov and Bank of America (BofA) analysts, who came together at an investor meeting recently, made heartwarming statements about the real usage areas and future of the oracle platform. BofA says its altcoin project is leading the DeFi market.
Altcoin project sheds light on DeFi industry
Decentralized finance (DeFi) was one of the key themes in the cryptocurrency market in 2021, with the industry growing from $18 billion a year ago to over $250 billion. While Ethereum takes all the credit for the emergence of DeFi, a new analysis sheds light on Chainlink, the unsung hero of the DeFi movement. BofA cites Chainlink as the driving force of the DeFi ecosystem, which has reached 206 billion TVL with an annual growth of 313%.
Chainlink hasn’t gotten enough credit for its role in the emergence of DeFi, according to a study published today by Bank of America (BofA). Following an investor conversation with Chainlink inventor Sergey Nazarov, the bank’s analysts have prepared a study claiming that Chainlink will likely lead the deployment of blockchain technology to a variety of different industries, including gaming, banking and gambling. BofA reports that more than $60 billion in deposits have been secured in Chainlink smart contracts as of February 15. That pool was just around $7 billion in late 2020.
Bank of America: Chainlink has a role in the emergence of DeFi
DeFi is a broad term that includes various services, but its essence is that it refers to financial services provided without the need for a central intermediary. It could be decentralized exchanges like Uniswap or credit and borrowing protocols like AAVE. These systems must always function properly and without errors. For example, AAVE, a lending and borrowing platform, can only source data from this network, as it is based on Ethereum. However, it needs data from other blockchains, exchanges and other sources.
The Chainlink oracle platform is useful in this case. This decentralized oracle network collects information from various sources and makes it suitable for platforms. According to Bank of America, the rise of DeFi in 2021 was “triggered by the ability of hybrid smart contracts, or self-executing and vandal-proof digital agreements, to verifiable and securely access real-world data such as market prices, time.” The report also cites that AccuWeather, Sportmonks, Associated Press and 800 platforms are leveraging the oracle network for monetization.