8 min readThe crypto landscape has transformed since bitcoin’s debut in early 2009. Originally intended as a peer-to-peer medium of exchange, but later seized upon by speculative traders, BTC’s underlying blockchain technology has been harnessed by protocols that spotted the potential for much broader use cases powered by smart contracts. One of the most exciting is bridging traditional finance with blockchains, where Chainlink is an invisible but essential player. This article explores Chainlink’s pivotal role in the future of finance.
Why finance needs bridges
Ethereum’s launch in 2015 heralded a new chapter for blockchain technology because it introduced the concept of smart contracts, programmes that execute automatically when preconditions are met. This was a major milestone because smart contracts serve as the building blocks for decentralised applications (dApps) that are driving the value creation which could one day lead to the ‘flippening’- the belief in some circles that Ethereum’s market capitalisation could surpass Bitcoin.
But there’s a problem. Blockchains operate in silos because they’re cut off from the real world. They’re a bit like a computer disconnected from the internet. On one hand, this design makes blockchains more secure by limiting the variables involved in reaching consensus about the state of the ledger. For instance, to complete a transaction, the protocol only needs to know that the sender has sufficient funds in their wallet and they have approved the transaction. On the other, smart contracts rely on external data sources to power the vast majority of use cases they enable. We explore the ecosystem later in this article, so for now, let’s use the simple example of a bet: a prediction market must confirm the outcome of a given event before it can reward the winner.
In the crypto community, this is known as the ‘oracle problem’.
Chainlink as the connector
Chainlink addresses the ‘oracle problem’ by serving as a bridge between blockchains and the real world. It gathers and verifies data and then feeds it into smart contracts, so they can complete a transaction. Incidentally, it serves other purposes too, namely interoperability (allowing different blockchains to communicate with each other and the global financial system), but this article focuses mainly on the oracle problem.
You can think of Chainlink as the data feeds, known as APIs, that supply the apps on your phone. Airlines and hotels use APIs to share data on pricing and availability with platforms like Booking.com or Expedia, which aggregate it to provide a broad range of options to meet every budget. The main difference being, dApps cut out the intermediaries.
Without getting overly technical, it’s worth noting that decentralisation is equally important to oracles as blockchains themselves. A single source of data is subject to a single point of failure- the information could be unreliable, or a malicious actor could manipulate it. However, Chainlink is a decentralised oracle network that requires participants, known as nodes, to agree on the accuracy of the data it transmits.
Real-world applications already live
Now that you understand how Chainlink works, it’s time to explore a few use cases that rely on the network. We’ll start with DeFi, where blockchain has caused the greatest disruption to date.
Stablecoins have earned the moniker of one of blockchain’s earliest ‘killer apps’. By pegging their value to a fiat currency, most commonly the US dollar, they pave the way for mass adoption by providing stability in what has historically been a volatile asset. Some of the applications include cross-border transactions, a base currency for crypto trading and savings products.
Issuers use various mechanisms to maintain this peg, which is where Chainlink comes in. TrueUSD, one of the top ten stablecoins by market cap (as of September 2025), is backed by fiat currency. Chainlink provides a continuous audit (known as Proof of Reserves) to confirm that the value of dollars and dollar-denominated assets held off-chain by its issuer, Archblock, matches the number of tokens in circulation.
Tokenisation of RWAs, primarily financial instruments, is another use case that relies on oracles. Chainlink’s proof of reserves solution enhances transparency in this space by verifying that issuers hold the off-chain assets represented by these tokens. Current users include OpenEden (Treasuries), Backed Finance (shares) and Cache Gold.
Onchain insurers also need oracles to help manage their products. On behalf of Etherisc, Chainlink gathers data required to process claims, such as rainfall and temperature, and then feeds it directly into the smart contracts that issue payouts.
‘Accessible and affordable crop insurance is crucial for smallholder farmers to increase their resilience to climate change,’ according to Etherisc’s Chief Impact Officer, Michiel Berende. ‘With the aid of Chainlink's decentralized oracle network, Etherisc has the potential to help improve the economic livelihoods of hundreds of thousands of farmers in East Africa.’
Let’s also touch briefly on interoperability. Chainlink has a long-established partnership with the SWIFT payment network, which processes trillions of dollars’ worth of transactions each day and announced the launch of its own blockchain in September 2025. Chainlink has already started exploring how it can enable financial institutions to link their back-end systems with SWIFT’s blockchain, based on lessons learned from a pilot project it ran in 2023, managing tokenised assets issued on private and public blockchains.
Why do oracles matter for investors?
Altcoins- an umbrella term used to describe any crypto that isn’t BTC- offer valuable diversification to a portfolio along with exposure to innovative technology, such as oracles and tokenisation. The universe is vast, and the quality varies broadly (over 50% of cryptos have failed since 2021). But LINK, Chainlink’s native token, isn’t just another altcoin. By bringing real-world data to blockchains, Chainlink is providing critical infrastructure that will boost adoption among users and enhance scalability.
Growing demand for oracles could support LINK’s fundamentals, since oracle services are paid for in LINK.. Research cited in a CoinDesk article in June 2025 shows that the market for tokenised RWAs had grown by nearly 400% over the previous three years to $24B. Estimates for its potential size range from $2T by 2030, according to McKinsey, to Standard Chartered’s bullish prediction of $30T by 2034.
Finally, Chainlink will benefit from network effects, where the value of a product, service or platform (famously social media) rises as more people use it. Chainlink has the biggest market cap of any blockchain oracle (as of September 2025), and this leadership puts it in a strong position to capitalise on future growth in the space.
Conclusion
Chainlink bridges blockchains and traditional finance, quietly working in the background to ensure that smart contracts receive the external data they need to run a broad range of dApps. It’s one of the key tools if blockchains want to scale and achieve widespread adoption. Understanding Chainlink and the role of oracles in the broader landscape is essential if you want to build a diversified crypto portfolio offering exposure to the innovation enabled by blockchain technology.
