Chainlink Price Collapses Amid DeFi and NFT Challenges

Chainlink price plunged to the lowest level since November 22 as investors the crypto fear and index plunged. LINK dropped to a low of $6.12, which was the lowest level since November 22. It has dropped by more than 21% from its highest level this month.

Staking introduction flops

Chainlink made headlines earlier this month as the blockchain network partially introduced staking features. This introduction was part of the platform’s transition into a decentralized oracle network (DON).

A DON differs from a centralized platform in that most operations are carried out by a decentralized autonomous organization (DAO). As a result, operates in the goals that Satoshi Nakamoto had when he founded Bitcoin.

By introducing staking, it means that LINK holders will be able to earn a return by simply delegating their tokens in the network. For now, this feature is available to a small group of users.

At the time of writing over 22.5 LINK tokens have been staked and are earning an APY of 4.75%. This return is slightly better than that of other popular coins like Ethereum.

DeFi TVL collapses

Chainlink price has collapsed because of the ongoing decline of the DeFi industry. Data shows that the total value locked (TVL) in DeFi has plunged to $61 billion. At its peak, there were over $150 billion of assets in the industry. 

Chainlink has a strong correlation with DeFi since its technology is widely used by some of the biggest players in DeFi. It provides them with price feeds and other products like Keeper, Verifiable Number Generator, and Automation.

Chainlink has also created a product to solve one of the bigges challenges today. After the collapse of FTX, many companies started publishing their proof-of-reserves. Using its technology, Chainlink is providing companies with these features to boost their transparency.

Chainlink price also dropped because of the collapse of the NFT market. This is notable because the network recently introduced NFT floor pricing feds that are useful in the industry. The developers wrote: 

“These feeds operate the same way as other Chainlink Data Feeds. NFT Floor Pricing Feeds are supported by Coinbase Cloud’s aggregation algorithm and Chainlink’s oracle infrastructure to help eliminate extreme price outliers.”