A mysterious whale is rapidly accumulating Chainlink (LINK). According to Lookonchain, it is an unknown entity, perhaps even an institution. withdrew More than 2.2 million LINKs (worth $42.38 million) were delivered in two days through 47 new wallets on Binance, the world’s largest cryptocurrency exchange by trading volume.
This sudden withdrawal of blocks raises questions about what is now capturing the attention of whales and what this could mean for LINK going forward.
Chainlink is at the core of DeFi and NFTs and is only gradually improving.
Chainlink is a popular project that provides secure middleware services and allows smart contracts to access tamper-proof external data. For this role, the platform has been adopted by several protocols providing decentralized finance (defi) services on Ethereum and beyond.
Chainlink also plays a role in non-fungible tokens (NFTs) through random number generators (RNGs). We continue to release new products and enhance features.
For example, last November, Chainlink upgraded its staking mechanism, releasing v0.2, significantly increasing the pool size to 45 million LINK.
The platform noted that the decision is in line with its broader goal of attracting more investors and, more importantly, enhancing security while achieving its “Economy 2.0” plan.
Staking originally began in December 2022. The goal was to expand the utility of LINK and encourage participation by allowing stakers to receive rewards.
The release of v0.2 in November means more tokens can be locked up, which helps make LINK scarce given the token’s role in the vast Chainlink ecosystem.
According to the tracker, more than 40.8 million LINKs have been locked so far. Chainlink confirms that anyone can earn a variable reward rate of 4.32%.
In addition to staking, Chainlink’s Cross-Chain Interoperability Protocol (CCIP) is being adopted. For example, the Hong Kong Monetary Authority (HKMA) launched the first phase of its e-HKD (e-HKD) trial incorporating CCIP in November.
As part of this trial, the regulator wanted to demonstrate the programmable payment functionality supported by Chainlink through its solution, CCIP. In DeFi, protocols such as Synthetix and Aave have adopted CCIP.
Will LINK breach $20?
As more protocols and more traditional institutions leverage this technology, demand for LINK (and its price) is likely to increase as the Fear of Missing Out (FOMO) sets in.
While the whales’ motivations are still unknown, the large accumulation of LINK suggests they may be bullish on the token. Notably, this coincides with the rapid rise in LINK price over the past 48 hours.
So far, the token is changing hands slightly below the psychological resistance of $20. A break above this level could push the token up to around $35 in the third quarter of 2021.
Featured image from iStock, chart from TradingView
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