1/ One day, I believe $LINK will flip $ETH both in terms of market cap and value proposition.

I don’t believe this based on hype, or because I’m awesome - which I am.

I believe this based on evidence and logic.

Crazy? Maybe. Possible? Definitely. Here’s how.

2/ One day enterprise software and legacy systems will start using #chainlink API inputs to feed data into their tools.

Those same enterprise software systems will also start offering “recipes” of pre-made smartcontract products direct to consumers.

3/ But we have a problem right now. In order to get enterprises to adopt all the benefits of using oracles and blockchain, it needs to offer them an economic advantage that far outweighs the cost of switching.

4/ If you’ve read my previous thread (below) you’ve seen as of now, most of what the chainlink network is providing are price feeds which are the lynchpin that is powering the current #DeFi (decentralized finance) gold rush. https://twitter.com/FriedWatts/status/1352797754280431616?s=20

5/ This must be a paradox for the #chainlink team because they’re a victim of their own success. How? Because the very data they're securing for #DeFi to exist is THE cause of high gas prices - which in turn makes it more expensive for oracles to compute and secure data on #ETH

6/ Another side effect of this problem of success? It directly affects the price of the $LINK token itself.

Yup, every time you see someone one CT crying about the “the founder is dumping on us” is actually not entirely true.

7/ If you’ve read anything about #chainlink, you do know that they did reserve tokens to kickstart the network by incentivizing early node operators (aka oracles) to participate before mass adoption happened as well as the ability to pay for talent to build the network.

8/ (The $YFI debacle proves to me that this decision to hold tokens to sell is actually a feature, not a bug).

But most of the price suppression, IMO, is actually from nodes having to dump their earned $LINK because they have to cover $ETH gas fees.

9/ In other words, they are not profitable yet.

It’s a downward spiral and it works like this:

- Link gives #Defi life via price feeds.
- #Defi gets crazy adoption which drives up #Eth gas fees for $link oracles.
- $link Oracles have to sell their $link to stay profitable.

10/ And investors and traders are left wondering and complaining why it’s “taking so long”

(ignore them, they don't know what they have and are too impatient)

11/ So how is this remedied? since $link is an (obfuscated) reason for the high gas fees on #Ethereum, and in order to get the enterprise adoption needed to kickstart the smartcontract economy, the #chainlink network needs lower gas fees, right?

12/ Enter Arbitrum. Arbitrum + Chainlink is one of the driving reasons I believe $LINK will flip $ETH.

So what is Arbitrum? In short, it’s a rollup scaling solution for #Ethereum that greatly reduces or almost eliminates #Ethereum gas fees for any chainlinked smartcontract.

13/ I’ll say that again. Arbitrum rollups greatly reduces or almost eliminates #ETH gas fees for ANY chainlinked smartcontract.

I won’t get into how it works. You can read more about that below. https://medium.com/offchainlabs/scalable-low-cost-computation-of-ethereum-smart-contracts-using-arbitrum-on-the-chainlink-8985c6542d4e

14/ But you should know, it’s coming extremely soon. In fact, it already has a test clone of #uniswap that offers 55x cost-reduced swapping (on testnet, not mainnet yet)

That’s right, 55x cost-reduced swapping. That's huge! https://medium.com/offchainlabs/arbiswap-our-port-of-uniswap-v2-on-arbitrum-rollup-2fe3c64bef00?source=collection_home

15/

Are you catching on now?

This is going to get a lot of hate but:

Imagine what happens when 90% or more of smart contract volume goes through $LINK vs $ETH since gas costs will almost be non-existent using #chainlink directly.

16/

And yes, $ETH has scaling that it’s working on and yes, $ETH will always have value as long as smart contracts live and are used on the platform. The future is still bright for the decentralized computation network.

End/

But, to me, $ETH is simply a pipeline and $LINK data is the oil.

And something you’ll ultimately have to ask yourself is:

which is more ultimately valuable, the pipeline or the oil that flows through it?