Chainlink and Arbitrum: A Partnership That Could Impact the Crypto Market
The leading decentralized cryptocurrency market oracle and Layer 2 Arbitrum have formed another important partnership for the blockchain industry. As a result, Chainlink Automation was launched in Arbitrum One. But how does this benefit the crypto market?
First of all, it is necessary to understand what Chainlink Automation is. The solution is designed to allow Web3 developers to automate core smart contract functions in a decentralized manner.
As such, they can make contracts more attractive while saving development time and resources. Another noticeable difference is the increased scaling speed.
With a focus on scalability, Chainlink Automation enables transactions to identify and confirm quickly even during times of network congestion.
In addition to being present on the market-leading altcoin blockchain, Chainlink Automation is present on the BNB Chain, Polygon, Avalanche, Fantom and has recently arrived on Arbitrum. The highlights of this latest collaboration are the subject of this article.
Chainlink and Arbitrum
As noted by Niki Ariyasinghe, Head of Blockchain Partnerships at Chainlink Labs, Arbitrum developers will be able to build highly scalable, low-cost smart contract applications in a decentralized manner.
This is an important milestone for the altcoin, as Arbitrum has been one of the fastest growing Layer 2s in recent months. As an example, major crypto market projects such as SushiSwap and Curve are already using scalability solution technology.
Moreover, Arbitrum managed to stand out during the collapse of FTX. On December 15, he recorded a 7.6% increase in TVL.
These developments are happening on Arbitrum, as it is an Optimistic Rollups technology. This layer 2 protocol is designed to extend the throughput associated with the Ethereum base layer (ETH). It allows smart contracts on the ETH network to scale.
Developers can create decentralized applications (dApps) with more functionality and at a lower cost by combining Chainlink’s smart contract automation solution with Arbitrum.
This partnership is another great novelty that the decentralized oracle brings to its holders with the arrival of staking for the LINK token.
During 2022, Chainlink was one of the blockchain projects that gathered the most partnerships around it, and it should continue on this trajectory in the coming year. For example, at the end of November, the oracle carried out 12 integrations of five Chainlink services on four different networks: BNB Chain, Ethereum, Optimism and Polygon.
The partnership between Chainlink and SWIFT, an interbank messaging system, has been a positive step for Chainlink in 2022. This collaboration will allow the decentralized oracle to work with a proof of concept, which helps businesses transact on the blockchain .
Since smart contracts cannot obtain data from off-chain on their own, they need decentralized oracles, and Chainlink manages to be the leading name for this solution.
As reported by U.Today, LINK could be a highlight of 2023, as there is a great need for more real data entering the blockchain and a high demand for tokenization by companies in this sector.
Roll-up solutions like those from Arbitrum, on the other hand, are showing investor interest as there is a great need for cheaper, more efficient, and faster blockchain developments – virtues yet unheard of on Ethereum.
While Ethereum 2.0 does not reach the market, the search for greater scalability, without losing the security of the smart contract mainnet, is intense.
In addition to being designed to enhance the functionality of ETH smart contracts, bringing more efficiency and savings, Arbitrum adds privacy features to these contracts. Therefore, investors and users of blockchain contracts feel more secure in their negotiations.
U.Today also pointed out that with the arrival of the Surge in 2023, projects that aim to grow in this area could be among the top choices for investors, and Arbitrum ranks as a top choice alongside Polygon ( MATIC).
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