Whitepaper

Introduction

Smart contracts introduce a technical challenge: Connectivity
Blockchains cannot directly fetch critical data
Chainlink will make smart contracts externally aware, meaning capable of interacting with off-chain resources, is necessary if they are going to replace the digital agreements in use today
Example of potential next-gen smart contracts and their data requirements include
- Securities smart contracts such as bonds, interest rate derivatives, and others
- Insurance smart contracts will need data feeds about IoT data related to the insurable event in question
- Trade finance smart contracts need GPS data about shipments, data from supply chain ERP systems, and custom data

Architectural Overview

On-Chain Architecture
- Chainlink has an on-chain component consisting of three main contracts
  - Reputation contract
    - Keeps track of oracle-service-provider performance metrics
  - Order-matching contract
    - Takes a proposed service level agreement, logs the SLA parameters, and collects bids from oracle providers
  - Aggregating contract
    - Collects the oracle providers responses and calculates the final collective result of the ChainLink query
- On-chain work flow has three steps
  - Oracle selection
  - Data reporting
  - Result aggregation
Oracle selection
- SLA proposal includes details such as query parameters and the number of oracles needed by the purchaser
- Purchasers can manually sort, filter, and select oracles via off-chain listing services
- ChainLink will maintain one such listing service, collecting all ChainLink-related logs and verifying the binaries of listed oracle contracts
- Automated oracle matching is also being proposed by ChainLink through the use of order-matching contracts
Result Aggregation
- Configurable contract address which is specified by the purchaser
Off-chain architecture
- Initially consists of a network of oracle nodes connected to the ETH network
- ChainLink nodes are powered by the standard open source core implementation which handles standard blockchain interactions, scheduling, and connecting with common external resources
- Node operators may choose to add software extensions, known as external adapters, that allow the operators to off additional specialized off-chain services
ChainLink Core
- Core node software is responsible for interfacing with the blockchain, scheduling, and balancing work across its various external services
External Adapters
- Adapters are external services with a minimal REST API
Subtask Schemas
- Many adapters will be open sourced, so that services can be auditing and run by various community members

Oracle Security

Why must oracles be secures?
- If a smart contract security gets a false data feed it may payout the incorrect party
- If smart contract insurance data feeds can be tampered with by the insured party there maybe insurance fraud
- If GPS data given to a trade finance contract can be modified after it leaves the data provider, payment can be released for goods that haven’t arrived
- Oracle must therefore serve users as an effective trusted third party
Defining oracle security: An ideal view
- Accept request
- Obtain data
- Return data

ChainLink Decentralization Approach

Distributing sources
- Simple way to deal with a faulty single source is to obtain data from multiple sources
- Pursue research into mapping and reporting the independence of data sources in an easily digestible way so that oracles and users can avoid undesired correlations
Distributing oracles
- Instead of a single monolithic oracle node, we can have a collection of different oracle nodes
Initial solution: in-contract aggregation
- On-chain part of ChainLink will itself aggregate oracle responses
- Benefits
  - Conceptual simplicity
  - Trustworthiness: can be publicly inspected
  - Flexibility
Medium-term strategy: off-chain aggregation
- This strategy will save on costs

ChainLink Security Services

Validation System
- Availability: will record failures by an oracle to respond in a timely way to queries
- Correctness: will record apparent erroneous responses by an oracle as measured by deviations from responses provided by peers
Reputation System
- Record and publish user ratings of oracle providers and nodes, offering a means for users to evaluate oracle performance holistically
  - Total number o assigned requests
  - Total number of completed requests
  - Total number of accepted requests
  - Average time to respond
  - Amount of penalty payments
Certification Service
- Goal is to prevent and/or remediate rare but catastrophic events, specifically cheating in the form of Sybil and mirroring attacks
- Sybil and Mirroring attacks
  - Sybil attacks: involve an adversary that controls multiple, ostensibly independent oracles
  - Mirroring: causes oracles to send individual responses based on data obtained from a single data-source query
- Certification service design
  - Issue endorsements of high-quality oracle providers
  - Means to identify Sybil attacks and other malfeasance that automated on-chain systems cannot
Contract-Upgrade Service
- Simply make a new set of supporting oracle contracts available in ChainLink
- Migration is a mechanism that fixes bugs and remediates hacks without resorting to such cumbersome approaches as whitehat hacking or hard forks
LINK token usage
- Pay ChainLink Node operators for the retrieval of data, formatting of data, off-chain computation, and uptime guarantees
- Will need to have this token to use their services

Existing Oracle Solutions

Most common options are centralized oracle providers
Manual human input of unstructured data
Change the form of data at the source

Roadmap

Team

Sergey Nazarov – CEO

Does not have any major experience, has started his own companies but none of them have been very successful yet. All privately held and with less than 10 employees.
Bachelors from NYU for Philosophy and Management

Steve Ellis – CTO

Has worked for Pivotal Labs as a software engineer. Pivotal Labs does about 500 million dollars in revenue a year.
Bachelors from NYU for Computer Science

Ari Juels – Advisor

Is a professor at Cornell Tech
Has a PhD in Computer Science

Evan Cheng – Advisor

He is currently the Director of Engineering for Facebook and has been in that position for two and a half years
He was a senior manager and Engineering manager for apple and worked for apple for ten and a half years
Masters from Syracuse for Computer Science

Jake Brukhman – Advisor

He was a technical product lead at Amazon for over two years
Bachelor’s from Rutgers for Mathematics and Computer Science

Brian Lio – Advisor

He was the Technical Director for DDB which is a worldwide marketing company with over 10,000 employees. He worked their for over a year.
He was the Marketing/Product Manager at Microsoft for two years
Bachelor’s from Rochester Tech for Computer Science and Entrepreneurship

Partners & Backers

“We’re proud to be working with SWIFT on their own SWIFT Smart Oracle. Allowing smart contracts on various networks to make payments, send governance instructions, and release collateral with over 11,000 banks”
“We’ve been chosen as a 2017 Blockchain Applications Cool Vendor by Gartner. We feel this validates the value that CTOs and CIOs see in our more secure approach to connecting smart contracts with critical external resources.”
We’re partnered with Cornell’s IC3, to help launch the first Intel SGX secured link between smart contracts and external data. This more secure way of running an oracle is the future and we’re glad to be moving it forward.”
“We were selected by the World Economic Forum’s Tipping Point report as the “Shift in Action” for Smart Contracts, for our work on allowing smart contracts in the Bitcoin network to be automatically triggered by external data.”

Articles

https://www.americanbanker.com/news/the-race-to-connect-smart-contracts-to-the-real-world

https://www.coindesk.com/swift-completes-blockchain-smart-contracts-trial/

https://www.marketwatch.com/story/previous-chief-scientist-of-rsa-releases-smart-contract-connectivity-whitepaper-facebook-director-of-engineering-llvm-creator-joins-chainlink-advisory-board-2017-09-11

https://coinjournal.net/smart-oracles-connects-financial-infrastructure-ethereum-bitcoin/

https://medium.com/@steveellis/go-chainlink-37cb077fae31

https://www.reddit.com/r/Chainlink/comments/83yfxh/official_chainlink_links_and_resources/

https://medium.com/@suchi.blackwing/cryptocurrency-code-review-chainlink-10b46f7b231

https://medium.com/@peterhaymond/why-decentralized-oracles-matter-7920ad04ee37

https://medium.com/@PAAlmasi/chainlink-decentralized-network-of-oracles-6844ff96f47f

https://www.theusacommerce.com/chainlink-link-is-working-to-connect-the-disjointed-blockchain-ecosystem/

https://www.capgemini.com/consulting-de/wp-content/uploads/sites/32/2017/08/smart_contracts_paper_long_0.pdf

Videos

https://youtu.be/D95jXGCXkqc

https://youtu.be/bEydgiPQgnA

https://youtu.be/u4_1AGq-ZCg

https://www.youtube.com/watch?v=0mBQJxrffyU&feature=player_embedded

https://www.youtube.com/watch?v=6kEwNq7Xx50

https://www.youtube.com/watch?v=yRJBNQwsniY

https://www.youtube.com/watch?v=8LVBQ0FoHwg

https://www.youtube.com/watch?v=qXxT3Z-cIFQ

CoinCheckUp

Conclusion

I would give ChainLink a B- rating. I personally don’t feel as if they are coming up with anything revolutionary. I do think that they have a good idea with connecting smart contracts together like interoperability. It seems like there are several companies in this space trying to have new and better smart contract ideas such as Fusion and Wanchain. There is no roadmap for this project which is also a concern. I think that a roadmap helps us as investors understand how hard a project is working and if they are meeting their own deadlines. The fact they do not have a roadmap is a red flag to me. I think that the two team members aren’t that fantastic, very little experience for a project so big. They have same amazing advisors that are supporting this project which gives me a little bit more confidence since some really great people believe in this project enough to advise it. Their partnership with Swift is also quite impressive since they clearly are working very closely with them. Swift is very connected and can help make ChainLink a very valuable investment. Over all this is a project you should have in your portfolio, but I would wait for some bigger announcements to hit the market before making this a top investment.