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Chainlink, the decentralised network that feeds real-world data to blockchains, has shown to be a formidable competitor in the oracle sector. Ethereum, on the other hand, is already well-known for its smart contract capability in the sector. The latter, on the other hand, is the most actively used blockchain in the ecosystem, and the former is the most commonly utilised oracle network.
The ecosystem has, additionally, seen smart contracts transition into hybrid smart contracts lately and the evolution is still on. Interestingly, a few weeks back, Chainlink’s Co-founder Sergey Nazarov had claimed in a podcast that he had always viewed smart contracts in the same way the ecosystem is now viewing hybrid smart contracts. He said,
“In my mind, a smart contract always combined a codified agreement in a highly tamper-proof, reliable form on a blockchain with a system that proved something about what happened (in the real world).”
Shedding light on the essence of hybrid smart contracts that thrive on the Chainlink ecosystem, Ethereum co-founder Vitalik Buterin recently commented,
“I think it is definitely necessary for smart contracts to do a lot of things that use off-chain data of some kind… So, projects that provide oracles are definitely really important. The definitely have different kinds of use cases.”
Another prominent blockchain business, Algorand, has made its presence known in the crypto-sphere. ALGO was ranked 41st on CoinMarketCap at the time of publication, with a market worth of more over $3 billion. Buterin argued that by drawing analogies between the two networks,
“Chainlink emphasises on – ‘we have this smart automated system that just gives you data quickly’ whereas at Algo, they do not give a crap about speed.”
Algorand’s network primarily focuses only on decentralization, scalability, and security. However, it does aim to provide “immediate” transaction finality, thereby not completely negating the “speed” factor.
Unsurprisingly, over the past 90 days, LINK has been “abnormally risky” while ALGO has been “exceptionally volatile.” Additionally, over the same time frame, Chainlink and Algorand have shared a positive correlation of 0.76, thereby implying that the effect of ALGO’s price movement has rubbed off fairly well on LINK. Nonetheless, over the past week, LINK has dropped by more than 4.36% while ALGO has registered an uptick of 10.07%.
Buterin went on to add,
“Chainlink is definitely taking a good important part of the oracle design space and I’m definitely happy, but at the same time I do think that their frog army on Twitter can get intense at times.”
Furthermore, while the executive appeared to be “impressed” with Chainlink and other Layer-2 technologies, he dismissed the possibility of embedding an oracle network into Ethereum’s ecosystem.
“I personally prefer Ethereum’s base layer to stay away from providing too much functionality and for that reason I would favor Ethereum itself to be more like a peer platform that just analyses transactions.”
According to Buterin, Ethereum has benefited more by not doing too much on layer one, with the executive ending by noting that other healthy initiatives in the ecosystem are already doing “interesting” things.