Chainlink (CCC:LINK-USD) is gaining popularity as an “oracle” technology for blockchains to provide real-time data to smart contract apps. I wrote about this in my last article last month on Chainlink crypto.
Since then, Mark Cuban has backed an Ethereum (CCC:ETH-USD) based app called dClimate, a decentralized network for climate data. The app also relies heavily on Chainlink’s oracle network abilities to provide large amounts of up-to-minute data on climate systems.
This could have huge implications for Chainlink going forward.
Mark Cuban’s Backing Could Boost Chainlink
So far this year LINK-USD has been on the move. At the end of December, Chainlink traded at $12.22 per token. As of July 14, it is at $17.17, implying that it is still positive this year at a rate of 40.5%.
However, Chainlink peaked at $52.20 on May 8 and has been in a free fall since then, along with a good number of other cryptos. In fact, in the past month, it is down $6.69 from $23.86 on June 13, about 28%.
But this could also be expected, since Ethereum is also down. For example, in the past month, ETH-USD has dropped from $2,537.89 to $2,007.64 today (July 14). That represents a drop of 21.9% from a month ago. This is slightly better than Chainlink’s performance but still represents a significant drop. However just like Chainlink, Ethereum is also up for the year. Starting the year at $730.37 per Ether token, ETH-USD is up 167% year-to-date.
Mark Cuban is extremely interested in Ethereum’s potential as a disruptor to SaaS (software as a subscription) companies. He has also invested in other Ethereum-related cryptos like Chainlink. For example, Decrypt.co wrote that he has invested an undisclosed amount in a Polygon (CCC:MATIC-USD) startup.
Cuban’s investment in dClimate is all about providing up-to-the-minute data to farmers and government users on the weather. They need this information so they can build projects or plan for future disasters.
What This Means For the LINK-USD Network
Coindesk said that Cuban’s investment follows a $3.5 million seed round in April, led by CoinFund and Multicoin Capital. Although it is not clear what amount Cuban came in for, it might be at a higher valuation than the original founders raised their capital. According to Coindesk, dClimate has a number of goals:
“The platform aims to be a decentralized marketplace for climate data, forecasts and models, connecting data publishers with buyers. It has a built-in mechanism to score the reliability of data as it is submitted, making the data more transparent.”
Decrypt says that the app uses Chainlink to retrieve the data that dClimate uses. Hundreds of partnerships and integrations with crypto projects started using Chainlink last year. This app is one of many that have seen its utility. The association with an app that Mark Cuban has linked with now gives it some cache.
What To Do With Link Tokens
Chainlink is now the 15th largest cryptocurrency with a market cap of $7.38 billion, according to Coinmarketcap. This is slightly higher than Polygon which trades for less than one dollar. It is the 17th largest crypto and has a market cap of about $6 billion.
However, in the past month MATIC-USD tokens have fallen from $1.4779 to 95 cents, a drop of 35.7%. This means it is much more volatile than Chainlink, which is down just 29%.
Therefore, investors in cryptos that are linked to Ethereum like Chainlink and Polygon might want to stick to buying Chainlink first. Both will benefit from the Mark Cuban aura effect around his involvement with these blockchains, but Chainlink might end up with a better return.
On the date of publication, Mark R. Hake held a long position in Ethereum but not any other security mentioned in the article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.