Chainlink Launches Value Flywheel: Institutional Coin Hoarding Wave Backed by $84.6 Billion in Assets

Original text: Miles Deutscher, encryption KOL

Compiled by: Yuliya, PANews

Original title: Chainlink starts the value capture flywheel, could it become the invisible winner of on-chain economy?

As RWA tokenization and institutional adoption become the core narrative of this bull market, Chainlink, as a key infrastructure connecting traditional finance and the digital world, is poised to become the biggest winner. Miles Deutscher points out that Chainlink is not just a project; its value capture mechanism creates a powerful "flywheel effect"—the increase in network usage will directly translate into sustained buying pressure and value accumulation for the $LINK token.

It is worth noting that Chainlink's recently launched "$LINK Reserve" mechanism has allowed the market to witness the true driving force behind the "flywheel effect." This mechanism automatically converts and accumulates the revenue from corporate partnerships and on-chain services into $LINK tokens, thereby directly linking the fundamental growth of the network to the value of the token. Since the announcement, the price of $LINK tokens has increased by nearly 50%. Below is the original text of the article, which has been compiled by PANews.

$LINK may be one of the most obvious large-cap investment opportunities in this cycle, but most people might miss it. It is the biggest winner benefiting from the institutionalization of encryption, as well as the explosive growth of stablecoins, tokenization, and RWA (real-world assets).

This round of bull market is highly aligned with the narrative of Chainlink, mainly due to the following reasons:

Fit of Macro Trends

The total locked amount of RWA has surged 13 times in the past two years, increasing from approximately $1 billion to over $13 billion, making it one of the strongest growing sectors in the field of encryption.

Institutions have recognized the slow and inefficient nature of the traditional SWIFT system and are unwilling to face the pain points of fragmented performance; instead, they hope to use a complete end-to-end platform. This is also why Wall Street giants like BlackRock are actively promoting asset tokenization, and why companies like Stripe (which launched the Tempo chain) and Circle (which launched the ARC chain) are building their own blockchains.

In a fragmented landscape with multiple chains coexisting, a "universal translator" is needed for interoperability, and Chainlink is providing this solution. Any tokenized stocks, bonds, or real estate require oracles to bring their value onto the chain, and $LINK is the market leader, holding a staggering 84% of the Oracle market share on Ethereum, making it a core infrastructure for this multi-trillion dollar transformation.

It is currently difficult to predict which L1 public chain will prevail, especially against the backdrop of numerous enterprise chains entering the market, and it is also uncertain which RWA application will stand out. However, it can be confirmed that Chainlink is powering all of this, becoming the most typical "gold rush shovel" type of investment.

For a long time, the market has generally believed that XRP would become the representative for institutional adoption, but in many respects, LINK has a higher level of implementation in this field than XRP, and considering the valuation, its upside potential is more attractive.

Data Comparison

• XRPL DeFi TVL is approximately 85 million USD
• Chainlink Total Value Secured (TVS) is approximately $84.65 billion.

Chainlink has over 1000 times more capital locked on-chain than XRPL, and its market share in the entire DeFi sector is still increasing, currently reaching 68%. Nevertheless, XRP's market capitalization is still approximately 12.1 times that of LINK, making LINK's value in the current price range appear more attractive.

It is worth noting that, besides Bitcoin and Ethereum, Chainlink is also far ahead of any other protocol in terms of adoption in the traditional finance (TradFi) sector, having been integrated by several TradFi giants, including:

• SWIFT
• DTCC (Depository Trust & Clearing Corporation)
• Euroclear (European Clearing Bank)
• JPMorgan
• Mastercard

Token Economics: Building the Value Flywheel

The value flow of the Chainlink network is mainly realized through the following methods, with two sources of income:

1. On-chain fees: When its services are used across different blockchain networks, on-chain fees are incurred. These fees are used to fund network operations and repurchase $LINK tokens.

2. Corporate Collaboration: Reach agreements with major companies and institutions such as SWIFT or JPMorgan Chase, which pay to integrate Chainlink's solutions. A portion of the funds will go into the Chainlink reserves to support its long-term development.

Currently, the protocol will automatically convert all income (including fees from private chains in $ETH or $USDC) into $LINK and deposit it into the strategic treasury.

In addition, the staking mechanism is also crucial. Users lock $LINK to ensure network security and earn a sustainable annual yield of approximately 4.32%. This creates a continuous supply tightening mechanism that removes tokens from the open market.

This creates a permanent, automated buyback mechanism that directly converts the network's adoption rate into purchasing pressure, forming a powerful value flywheel:

Adoption increases → Income rises → More $LINK is bought and locked → Network security and resources enhance → Utility improves

Technical Analysis and Summary

From a technical chart perspective, $LINK has broken through the weekly resistance zone of $20. This price level has been an important bull-bear pivot point for years, and its significance is essentially equivalent to ETH's $4000 level.

In summary, Chainlink's value can be understood this way: if AWS, Azure, and GCP (the three major cloud service providers) were to spin off from their parent companies, their value would reach trillions of dollars. And Chainlink is the foundational B2B infrastructure of the entire on-chain economy.