This is a message addressed directly to Chainlink holders. If you're holding LINK, this is important for you to read, because I've held Link before, I bought into all the hype, and then I sold it. I care about your success as a crypto investor, and I have some information that I think is very important for you to digest and think about when it comes to Chainlink. Note up front that I'm not a financial advisor and this is not financial advice. I have tens of thousands of Internet Computer Protocol, so you can clearly see what my position is and what I've put my own money into.
With that said, you might wonder why I held Chainlink in 2023, hyped it up for a while, and then sold it. It's because of the research I'm about to walk through here. I'm not going to act like I'm some expert who knows everything. I'll tell you straight: you can look all of this up yourself. You can go to ChatGPT or Grok and they will lay all of this out in writing for you if you just ask them to give you all the criticism for Chainlink, and then you can put these pieces together in your own head.
The criticism even the AI tools won't surface
One of the biggest things I have that ChatGPT and Grok will not tell you is that Internet Computer Protocol is allowing developers to build in an environment where you don't need oracles at all anymore. If you somehow don't know what Chainlink is and you're holding it, Chainlink is basically solving the problem where all blockchains besides Internet Computer Protocol cannot actually go get data from the outside world. They need a third-party service to come in and, for example, tell them what the price of Ethereum is on Coinbase. That's the role Chainlink has been fulfilling.
When you build on Internet Computer Protocol now, though, you can build everything: your front end, your back end, your website, all the databases. You can even put AI models on chain. And then Internet Computer Protocol has HTTPS outcalls, so you can go directly to Coinbase from within your application on ICP and pull the feed there without using Chainlink at all. So to me, the number one criticism that Grok or ChatGPT won't even have for you is that oracles in the future are not even going to be used anymore, which makes all the other things I'm about to say so much worse for Chainlink.
Centralization and the on-chain problem
The other concerns are easily replicated and easy to look up in more detail. One of the big technical criticisms with Chainlink is that everything appears to be very centralized from what I can see. The oracle network looks much more centralized than claimed, with a small number of nodes handling a large volume of price feeds. That means you're going through a centralized third party again, which is exactly what we're trying to avoid in crypto. It removes any thought of real decentralization. There's also very little transparency in how the nodes are operating. And the nodes aren't even on-chain.
Do you realize Chainlink is just an Ethereum token? Yes, it has been bridged over to other blockchains, but Chainlink is not a Layer 1 or Layer 2 blockchain. Internet Computer is actually both a Layer 1 and a Layer 2, and on Internet Computer Protocol you can do everything fully on-chain. With Chainlink, you're talking about just an ERC-20 token. That ERC-20 token has no control over whatever they're doing at the Chainlink Foundation. It has no legal ownership. It's not a stock. If it were a stock, it would carry legal ownership over whatever they're building. But the Chainlink token does not give you legal ownership over all these oracles and infrastructure that sit off-chain. To me, that is a massive problem.
The Chainlink token also doesn't give you ownership by code. On the Service Nervous System on Internet Computer Protocol, you can create tokens that actually give you ownership by code over the protocol, so you can build things that at least have the potential to be truly decentralized, assuming the token ownership is real. With Chainlink, absolutely not. In my mind there's no real thought of any actual decentralization, because the Chainlink Foundation controls all the things that are creating real value for Chainlink.
And the problems keep stacking up. There's no slashing mechanism. If the Chainlink nodes aren't working properly, that's an issue, although when it's centralized they can just handle it themselves. There are newer oracle networks that do have actual slashing mechanisms to manage the nodes. Still, the biggest problem is all this reliance on off-chain data input. You cannot verify the integrity of the data when you're pulling it off-chain.
Why I sold: the token and the community
Those are the primary technical concerns, but there's even more. I've been very critical of Chainlink over the years because the token itself, to me, basically looks like a meme coin. When I did hold Chainlink and was participating in the community, the community was very toxic about the amount of LINK that the insiders were constantly dumping on all the holders. That's what got me thinking: these insiders have huge amounts of tokens, they're constantly dumping and unlocking, so why am I being the fool that's getting dumped on all the time?
That comes back to the weak utility for the LINK token. The primary utility for the token appears to be paying node operators. Seriously, the node operators could be paid in fiat or stablecoins or any other currency. It just means Chainlink takes the tokens and gives them to node providers, who you can imagine then just dump the token. What is the point? I don't see the real value of that. The node operators appear to be centralized. It doesn't seem clear how they're even chosen or how they're managed, and the only value of the token is that node providers get paid in LINK. This looks so bad. And that's why I sold.
A lot of what you see with Chainlink moves on hype and partnerships, not on real usage of the token. This is something you can look up yourself: look at the partnerships Chainlink has announced and see what good has actually materialized from them. You can see the price move off of these announcements, but what real outcome has come from them? I don't see anything. It seems almost all speculation and hype.
No real governance, and a shaky foundation
Critics also point out that it took Chainlink years just to roll out simple staking. And when you look at the governance, there's no community-based DAO or formal governance system at all. Other coins have these, even though in most cases they don't provide much genuine value and it still ends up being centralized. But at least other coins make it look like there's a DAO, even if the developers do the opposite of what the DAO votes for sometimes. On Internet Computer Protocol, you have a real DAO that's fully on-chain, where anyone for $5 can buy an ICP token, stake it, and vote. On Chainlink, to me, the lack of governance kills the utility, because there's not even the appearance of a DAO. So I see absolutely no reason to hold the LINK token outside of hype, speculation, and hoping the price goes up, which to me is insane.
When you look at what else is happening in the market, you've got all these other oracles popping up, and then you've got ICP. To me, this is a recipe for disaster: very high risk, very low potential return. On top of that, ChatGPT will tell you that Chainlink's feeds are expensive, especially for smaller protocols, which pushes them to explore alternatives like Internet Computer Protocol or other oracles. Chainlink is also very dependent on Ethereum. The less Ethereum is adopted, the more the competitors thrive. Ultimately, the Chainlink token is an ERC-20 token, so the more liquidity flows out of the Ethereum ecosystem, the worse that is for Chainlink.
And all of this is possible because of a lack of retail understanding. In my view, 90-plus percent of LINK holders do not understand the actual utility of the token. It just looks to me like a cult-like project. This is exactly why you need to understand this stuff for every token, blockchain, and Layer 1 crypto you hold, because this is what really matters.
Think it through for yourself
So if this has made a difference for you, again, I'm not a financial advisor and I'm not telling you what to do with your investments. What I am telling you to do is think about the information I've shared. Try looking this stuff up for yourself on ChatGPT or Grok, which will give you all of this in much more detail along with sources. Think about these things more, and consider where the future is going. Chainlink has a bigger market cap than Internet Computer Protocol, despite ICP having, in my opinion, the absolute best tech in crypto. And the fact is, any money you have in LINK is money you can't have in anything else. You can't have it in the bank, you can't buy something with it, and you can't have it in a different crypto. To me, this is a really important message, and if you want to go deeper on how I think about money and crypto, you can explore my Money playlist.