Oracle demand set to explode? Weiss Ratings boldly predicts Chainlink: Market price expected to soar 5 times

Weiss Crypto Ratings predicts that with the advancement of blockchain technology and the rise of smart contract adoption, the demand for the Oracle project Chainlink will increase. The rating agency forecasts that its market price could potentially increase fivefold from its current price.

Flaws in Smart Contracts

Weiss Crypto Ratings analysts Bruce Ng and Juan Villaverde pointed out in an article that one of the reasons for the explosive growth of smart contracts in the future is DeFi, as it can almost do everything traditional banks can do. This includes matching lenders and borrowers, ensuring all payments and repayments are made correctly and on time, and collecting the necessary fees during the process.

However, Weiss Crypto Ratings highlighted a key issue in the article, stating that since the blockchain itself is a data island and cannot directly interact with external data, smart contracts built on the blockchain, as well as DeFi, cannot avoid this problem:

"...Smart contracts are products built on the blockchain and cannot interact with the outside world. Therefore, they cannot know market interest rates or exchange rates, the value of assets backing a contract, or even today's date. All this critical data must come from external sources."

Rising Demand for Oracles in the Future

Chainlink is a trusted oracle project designed to integrate off-chain data into the blockchain. In simple terms, Chainlink can securely import data from off-chain sources into smart contracts to drive the execution of corresponding instructions.

According to Weiss Crypto Ratings, as smart contracts gain mainstream adoption, the market demand for tokens will skyrocket.

"This is where Chainlink (LINK) comes in, as it is the provider of real data for smart contracts, and all fees for these services must be paid in LINK. LINK serves as the fuel for running smart contracts and purchasing data. With the exponential growth in the number of smart contracts, the demand for LINK will further increase."

Furthermore, analysts pointed out that many well-known blockchain projects (such as Tezos, Fantom, Zilliqa), DeFi projects (such as Synthetix, Aave), and even global tech giants (Google, Oracle) have established partnerships with Chainlink, making it one of the most widely adopted projects in the current market. The analyst concluded that considering all these factors, they believe the trading price of LINK will rise to $20, almost five times the current trading price.

Increasing Competition in the Market

Although oracles are a necessity in the current blockchain industry, not all projects will necessarily choose Chainlink. There are increasingly more projects developing oracles (such as Band Protocol, Tellor, etc.), and some centralized service providers are also developing oracle functions (such as Coinbase). Even the Ethereum community has discussed developing Layer 1 oracles. Therefore, we can expect that Chainlink will inevitably face more and more competitors in the future.

Currently, Chainlink remains one of the most mature and steadily developing top projects in the field. With the future launch of staking, it will undoubtedly drive the demand and price of the token higher, making the future upside potential still worth looking forward to.