A mysterious whale is rapidly accumulating Chainlink (LINK). According to Lookonchain, the unknown entity, possibly an institution, he retired over 2.2 million LINK (worth $42.38 million) across 47 new wallets from Binance, the world's largest crypto exchange by trading volume, in two days.
This sudden withdrawal from the block now raises questions about what is driving the whale's interest and what it could mean for LINK in the coming days.
Chainlink is key in DeFi and nft, gradually improving
Chainlink is a popular project that provides secure middleware services and allows smart contracts to access external data in a tamper-proof manner. For this feature, the platform has been adopted by multiple protocols offering decentralized financial (defi) services on ethereum and beyond.
Additionally, Chainlink plays a role in non-fungible tokens (NFTs) through its random number generator (RNG). It continues to launch new products and improve their features.
As an example, in November, Chainlink updated its staking mechanism and released version 0.2, which significantly increased the pool size to 45 million LINK.
The platform noted that the decision was to attract more investors and, more importantly, strengthen its security while aligning with its broader goal of achieving the “Economy 2.0” plan.
Initially, staking began in December 2022. The goal was to incentivize participation by expanding the usefulness of LINK and allowing bettors to receive rewards.
The release of v0.2 in November means more tokens can be locked, which helps keep LINK scarce, considering the token's role in the vast Chainlink ecosystem.
Trackers show that so far more than 40.8 million LINKS have been blocked. Chainlink confirms that anyone can earn a 4.32% variable reward rate.
Beyond staking, Chainlink's Cross-Chain Interoperability Protocol (CCIP) is gaining adoption. As an example, the Hong Kong Monetary Authority (HKMA) began its first phase of testing the e-Hong Kong Dollar (e-HKD) in November, integrating the CCIP.
As part of this test, the regulator wanted to illustrate the capabilities of programmable payments enabled by Chainlink through its solution, CCIP. In DeFi, protocols like Synthetix and Aave have adopted CCIP.
Will LINK go over $20?
With more traditional protocols and institutions leveraging the technology, demand for LINK (and prices) will likely increase as fear of missing out (FOMO) arises.
While the whale's motives remain unknown, their large-scale accumulation of LINK suggests that they could be bullish on the token. In particular, it coincides with the strong expansion of LINK prices in the last 48 hours.
So far, the token is changing hands slightly below the psychological resistance of $20. Any break above this level could lift the token to around $35 in Q3 2021.
Featured image from iStock, chart from TradingView
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