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Illumination

Year in Review: 2020

An overview of the progress made in 2020 - 2021-01-07

The year foregone will be one to remember. Perhaps this can be put down to the coronavirus pandemic. Or rather, perhaps this is due to the significant advancements we experienced in the blockchain ecosystem. Despite the challenges of the global pandemic, the blockchain community continued building systems and decentralised solutions and there are many accomplishments that should be celebrated.

The Rise of Decentralised Finance

The year of 2020 saw major advancements for Decentralised Finance (DeFi). Several blockchains joined the DeFi bandwagon and we saw a huge proliferation in the number of projects and protocols associating themselves with the DeFi moniker. DeFi use cases surged in both popularity and number. Just a few of the use cases included decentralised exchanges (DEXs), stablecoins, lending, and borrowing platforms, "wrapped" bitcoins (WBTC), prediction markets, yield farming, liquidity mining, and composability.

Ethereum: number one

Ethereum—the original smart contract platform and at present the leading smart contract platform—has exceeded its previous usage profile. On 17 September 2020 there were 1.4 million daily transactions recorded on the Ethereum blockchain. This figure represented an all-time high and even surpassed the peaks during peak ICO mania in 2017.

Ethereum dominance can be confirmed by analysing the Total Locked Value (TLV) of the most popular DeFi applications and protocols. At the time of writing, TLV had just passed US$18 billion, however, arguably of more importance, 49 out of the 50 top protocols listed were based on the Ethereum blockchain.

Ethereum begins its transition to POS

Last year saw the successful first phase of the transition from Ethereum 1.0 to Ethereum 2.0. Ethereum 2.0 implements Proof of Stake (POS) which enhances the speed, efficiency, and scalability of the network by processing more transactions and easing bottlenecks. For many, this transition could not have come sooner, as the rising popularity of DeFi protocols running on Ethereum, at times, led to prohibitively high Ethereum gas prices and corresponding network congestion.

Ethereum does not operate within an empty playing field, however, and the limitations surrounding Ethereum’s current levels of scalability have spurred the growth of numerous competitors. These include L1 solutions like Matic, Polkadot, Cosmos, Tezos, and L2 solutions that include rollups (both ZK and Optimistic Rollups), State Channels, Plasma, Validium. Although comparatively small, these alternatives are gaining prominence within the blockchain and DeFi spaces, and this trend is only likely to continue in 2021.

The good, the bad, and the ugly

There were plenty of attacks and failures on oracle systems in 2020, resulting in losses totalling millions. Protocols relying on centralised oracles were particularly susceptible to exploitation, including MakerDAO and CompoundFinance. The importance of oracle security and reliability is becoming continuously clearer. Building a more robust, transparent, and secure oracle network is central to reputation.link’s ambition. We will continue to negate attacks and secure the decentralised finance ecosystem while highlighting the importance of oracle performance.

Chainlink continues to grow

While Ethereum grew, so did Chainlink and its decentralised oracle network, which had a monumental year in 2020. Its string of successful developments led to the World Economic Forum releasing a whitepaper naming it “one of 2020’s most outstanding technology pioneers''.

The growth of DeFi has undoubtedly fuelled the rapid growth of Chainlink, but the Chainlink network represents much more than the most widely used price oracles in the DeFi market. The year of 2020 saw Chainlink use cases such as gaming, insurance, supply chain, verifiable random functions and proof of reserves gain in both visibility and actual usage.

Chainlink’s numbers skyrocket

Last year saw the number of confirmed Chainlink integrations, collaborations, and partnerships surge to well over 300. The number of verified Chainlink node operators has well surpassed 50, as seen on reputation.link's network statistics.

A total of 243 Chainlink integrations were announced in 2020. The list of confirmed integrations includes 136 DeFi projects, 75 blockchains, 28 data providers, 22 users of the verifiable random functions (VRF), and 18 gaming projects.

Projects as diverse as Aave, Synthetix, Loopring and 1inch use the Chainlink network to secure billions of dollars worth of assets. Arbol and Etherisc are leading the field in parametric insurance products. Axie Infinity and Blocklords use Chainlink for their gaming offerings and Huobi, Coin Gecko, and Coinranking are all building nodes to allow smart contracts access to their proprietary data.

Chainlink network statistics are equally as impressive. The infographic below summarises the network activity over 2020, as monitored by reputation.link.

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Chainlink nodes powering the network

It was wonderful to see 181 new nodes join mainnet and earn LINK in 2020, and this number is just scraping the surface. There are an abundance of nodes on testnets and other networks that we will support on reputation.link in 2021. In early 2021, nodes on any network will be able to register on reputation.link and display their reputation. Congratulations to all the nodes who made the transition to becoming a verified node operator in 2020! One of these nodes is TrueLinkNode:

"Being a new node operator with Chainlink has been as I expected: a lot of learning but well worth the effort! Now that we’re a verified node operator for both testnet and mainnet, we need to grow our business; building a reputation profile on reputation.link will certainly help. I believe the real quality our node can offer the Chainlink network is the quality of the data that we provide and the infrastructure that our node is maintained on. We’re just getting started, everyday we’re learning more about the ecosystem and making our node a more reliable source of information." Triston Edwards - TrueLinkNode

We concluded 2020 with the top 10 Chainlink nodes securing smart contracts as follows: Secure Data Links, Prophet, SyncNode, DexTrac, ChorusOne, Easy2Stake, LinkPool, SimplyVC, AlphaChain, and CertusOne.

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“As an early node operator, it has been incredibly rewarding to have a front-row seat as the growth of the Chainlink network accelerates. Over the last year we experienced incredible support from the Chainlink ecosystem and team on a daily basis, and the rallying together of all node operators to ensure stability during unprecedented circumstances. Our nodes now provide a rich and ever-expanding set of data supporting hundreds of platforms across a growing number of blockchains, and it truly feels like we're just getting started. Looking to the future, the new functionality and capabilities being developed for Chainlink nodes will unlock more use cases for smart contracts while increasing security and reliability, and we couldn't be more excited to stand shoulder to shoulder with the talented builders pushing the Chainlink network forward.” Ian Read - LinkPool

More than just numbers

Chainlink also rolled out a number of technical advancements in 2020, including the implementation of Flux Aggregators and new use cases such as VRF and proof of reserves. Chainlink price feeds were launched on Matic and the Binance Smart Chain and Chainlink integrated with other blockchains, including Polkadot, Tezos, xDai, BSN (China), Cosmos and RSK to name but a few.

Community engagement remains strong, and the Chainlink hackathon held in September boasted 1000+ signups, 70+ project submissions, and developer participation from over 45 countries across multiple different blockchains. Winning entries were as diverse as ‘Link My Ride’: a project that melded the use of oracles, smart contracts and Tesla electric cars, submitted by Harry Papacharissiou, Matt Durkin, and Dunken Bliths; and ‘The Open Library Project’: a project that explored blockchain based peer to peer book rental systems, submitted by Aaron Wasserman and Aram Moghaddassi. These kinds of projects excite us at reputation.link, as they explore unique use cases for the Chainlink middleware. We have only just scraped the surface of the possible applications of the Chainlink ecosystem and we can’t wait to see what 2021 has in store.

"We loved participating in the Chainlink Virtual Hackathon. Our submission is an example of the potential new business models and use cases that are possible with externally connected smart contracts and the Chainlink Oracle network." Harry Papacharissiou - Link My Ride

In August Chainlink held the first iteration of Smartcon: a smart contract virtual summit that united decentralized finance (DeFi) developers, enterprises, dApp builders, node operators, researchers, and the wider Chainlink community alike. The summit was hosted over two full days and boasted over 8,000 attendees from more than 100 countries. There were over 130 speakers taking part in more than 70 talks, panels, workshops and AMAs.

Chainlink seeding growth in the community

Late July marked the launch of the Chainlink Community Grant Program. The aim of this initiative is to accelerate the adoption of smart contracts, by deploying financial resources to teams that are building tools and services to support and grow the Chainlink Network.

A diverse range of recipients have already benefitted from this program. At reputation.link, we’re particularly interested in the Ethereum Name Service (ENS) project, SimplyVC’s monitoring and alerting system and a community led Chainlink news website built by TheLinkMarine.

Reputation.link grant to support oracle explorer

In August, reputation.link became the recipient of its own Chainlink community grant. The grant was awarded with the specific objective of creating a more advanced oracle explorer for the Chainlink ecosystem. The explorer comprises a suite of data visualisation tools that focus on providing clear insights into API providers, oracles, Chainlink reference data contracts, and how they all interact with the Chainlink network.

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Reputation.link up and running

8 May 2020 marked the official launch of reputation.link. Since launch date, the team has released a steady stream of feature updates that we believe has significantly improved the utility and functionality of reputation.link.

We have also created a dedicated Chainlink network statistics and a protocol specific statistics page.

We introduced the ability to compare oracle responses for given aggregated price feeds. In addition, the Chainlink contract page was launched, which contains comprehensive overviews of real time and historical contract responses. Ropsten support was added and we introduced a reputation.link API which is a free to use API which can be used to access data captured by reputation.link.

Away from the tech

We were pleased to be invited to present at Smartcon and we participated in an AMAs with the Chainlink team. We also launched Illumination, which is a dedicated space that aims to both educate and to provide a platform for community members to voice their opinions on all things related to the oracle space.

What's next: 2021

For Chainlink, in 2021 we have the promise of Off-Chain Reporting contracts (OCR), and the unveiling of threshold signatures and mixicles.

We will witness greater adoption of the Chainlink network across many competing blockchains and see a growing symbiosis between Chainlink and projects like Keep3r and Arbitrum. At reputation.link, we’re most excited to see a host of as yet unimagined use cases that will drive further innovation. We will see many more node operators, more price feeds, and a growing number of third-party applications that enhance the Chainlink ecosystem, which will be displayed on reputation.link. There will be more diverse data sources made available and very likely unheralded new initiatives in line with Chainlink's tendency for unheralded progress.

As for reputation.link in 2021, we aim to continue to innovate. The scope for development within the oracle space is truly remarkable. We have plans to open source and implement a modular architecture within reputation.link. We are also exploring a number of ideas that encompass governance and security.

In 2021 we will be more community-orientated and driven than ever before. As such, we’ve launched a space for community members to request features, provide feedback, and get involved in building reputation.link. Visit reputation.canny.io to help guide the development of reputation.link during 2021. And of course, please join our Discord and share your thoughts.

Undoubtedly, 2021 promises to be another momentous year for blockchain, smart contracts, and the oracle space.

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