- Band, Tellor and DIA are Chainlink’s main competitors for dominance in oracle services market.
- Chainlink’s strongest competitors are consolidating major partnerships.
Chainlink‘s (LINK) position as the number one provider for oracle services could be challenged. According to influencer and crypto investor Lark Davis, there are several oracle service projects with a profit potential of up to 100x. In his most recent video, Davis mentioned the top 3 that will compete to dominate the growing demand for oracle services.
Chainlink’s oracle services are an essential part of the crypto ecosystem. In Ethereum’s DeFi, for example, decentralized applications (dApps) need off-chain information to perform certain functions. Chainlink’s services enable safe and reliable information to enter the blockchain. In that way, as Davis said, they are a kind of pipelines for an industry with a commodity that continues to appreciate: information.
Top-3 competitors for Chainlink (LINK)
The first competitor Davis introduced is the Cosmos-based Band Protocol. Band is the biggest competitor, Davis said, because of its partnerships with other blockchains. With a market capitalization of $150 million, Davis said the profit margin offered by Band is significant:
The Cosmos-based data chain oracle has a big focus on DeFi (decentralized finance) as well as uses cases beyond the blockchain world…Of the three oracles we’ll mention today, BAND is without a doubt the biggest competitor right now to Chainlink.
It has partnered up with just loads and loads of different cryptos including some very famous ones. We have TRON (TRX), Fantom (FTM), Nervos (CKB), Binance Smart Chain, dForce (DF), ICON (ICX), Elrond (EGLD), Gravity, Waves (WAVES) – just loads of others.
The second most important competitor for Chainlink, according to Davis, is Tellor (TRB). Unlike Band, Tellor is an Ethereum-based oracle service that uses the Proof-of-Work consensus protocol. That way, miners are responsible for collecting information before sending it to the smart contracts on the blockchain.
With a smaller market capitalization than Band, $33 million, the Tellor project still has plenty of room to grow and turn a profit, Davis said. Tellor’s weakness is its low cooperation with other blockchains. However, Tellor’s oracle service just received a major performance upgrade, as Davis added:
The Tellor v2 upgrade has actually just launched and it is bringing about a big performance upgrade in terms of speed of settling data on-chain. More data points per block are also being added. We have better security parameters being brought in as well as token fee burning, which is pretty gosh darn big for the long term price appreciation for Tellor.
The latest major competitor for Chainlink is the open-source platform for oracles services called Decentralized Information Asset (DIA). Built as a DeFi oriented platform, DIA allows market players to share reliable information. The influencer described it as the “Wikipedia of oracles”. With a market capitalization of 37 million dollars, the platform has been consolidating important partnerships with blockchains such as Elrond and providing data for some main protocols on Ethereum’s DeFi, such as Aave, as Davis said:
DIA token holders internally manage, obtain, and validate data through crypto-economic incentives and staking governance tokens.
As the influencer said, the Chainlink competitors mentioned are “only the main ones”. However, there is still a significant number of projects that could dethrone Chainlink.