Top Oracle Tokens Update: LINK, BAND, UMA, API3, and RLC

In the past 24 hours, Bitcoin and Ether have managed to post moderate gains and are now trading at $26,381 and $1,667, respectively. As a result, the total crypto market cap has also risen 1.8% to $1.1 trillion.

The price actually remains well below levels that are likely to inflict “maximum pain” on buyers of August expiry option contracts.

On Friday, Deribit will settle 72,000 BTC August options contracts worth $1.9 billion and 535,000 ETH options contracts valued at $893 million. For these settlements, the max pain levels for BTC and ETH are currently at $28,000 and $1,800. As a result, put options buyers emerge as winners as they are in-the-money and have a right to sell the underlying asset at a price greater than the current market rate.

The same day, the Federal Reserve Chairman Jay Powell will be delivering the keynote speech at the Kansas City Fed's Jackson Hole Symposium. It is expected that Powell will talk about the central bank remaining focused on containing inflation and deciding its monetary policy.

Meanwhile, on Wednesday, Dan Morehead, founder of crypto investment firm Pantera Capital, took to X (previously Twitter) to note that the largest cryptocurrency has completed its longest-ever period of negative year-over-year returns this summer, and it won't last. “Our view is that we've seen enough,” Morehead wrote. “There's just so long markets can be down.”

As of June 12, BTC price had been negative on a year-over-year basis for 15 consecutive months, which, before this, had been less than a year between Nov. 2014 and Oct. 31, 2015, Morehead said. Also, Bitcoin has been up 23.6% over the past year and 60% in 2023 so far.

As for possible positive catalysts, Morehead pointed to “endorsements” from BlackRock and Fidelity, July's positive court ruling on XRP, and the upcoming April 2024 halving.

According to him, the fact that halving is so widely known doesn't affect the narrative, “If the demand for bitcoins stays constant and the supply of new bitcoins is cut in half, this will force the price up,” he said. His models suggest BTC bottomed late last year and should hit around $35,500 by the halving and nearly $150K by late 2025.

For now, the broad crypto market continues to be in the red, with the decentralized finance (DeFi) sector on a decline. The total value locked (TVL) has fallen to $37.5 billion, not only lower than the post–bull market low of $38 billion set in December but the lowest since February 2021, as per DefiLlama.

As we saw, the past few days have been rough for the whole crypto market, and as the largest cryptocurrencies fall, traders pull liquidity out of more speculative assets to mitigate risk, as happened last year when bitcoin dropped over 75% from its all-time high (ATH) and many altcoins plummeted by over 95% from peaks. This year, DeFi has fared worse than ETH, which is up about 40%. Besides DeFi, another category that has been hit hard has been Oracle tokens.

Blockchain Oracle Projects

When it comes to blockchain networks, they cannot access important data from external sources. In some cases, smart contracts need data inputs from external sources to execute a specific code. This is where blockchain oracles come into the picture.

Oracles are used by protocols to obtain external data, allowing the closed-off blockchain environment to communicate with data points on the outside world. They allow for the functioning of innovative and useful decentralized applications (DApps).

The Oracle market has grown a lot over the past few years. Today, the market cap of Oracle tokens is $4.06 billion, up 2.2% in the last 24 hours, while managing $245.5 million in trading volume.

Now, let's look at some of the most prominent Oracle projects in the crypto market!

Chainlink (LINK)

LINK is the biggest Oracle project and the 24th largest token, with a market cap of $3.36 billion. Trading at $6.25, LINK is up 0.6% in the past 24 hours and about 13% this year. The token has lost 12% of its value over the past year and is currently down 88% from its ATH.

LINK's price has actually been stuck in sideways movement for about a year and four months, keeping between $5 and $10. Currently, $6.56-$6.62 is a consolidation zone with no catalyst waiting to provide momentum to the token.

It is the native cryptocurrency of the Chainlink that connects blockchains with external data. The protocol was created by entrepreneur Sergey Nazrov and software engineer Steve Ellis in 2017. The same year, the token held an ICO for 35% of its total supply for a total of $32 million, and the remaining tokens were allocated to Link's founding team (30%) and for its token reward system (35%).

LINK provides the incentive mechanism for users to participate in the platform's decentralized network of oracles. It uses a type of PoS consensus protocol where participants have to run their own nodes and are required to provide data to smart contracts to receive LINK tokens as a reward. LINK has a hard cap of 1 billion, out of which just over half are currently circulating in the market.

Over the past year, the project has launched the Chainlink Economics 2.0 initiative called SCALE to accelerate the growth of blockchain and layer-2 ecosystems while enhancing the economic sustainability of its own network.

Click here to learn all about investing in Chainlink (LINK).

Band Protocol (BAND)

BAND is a $138.5 million market cap token trading at $1.04, up 5.3% in the past 24 hours. 2023 hasn't been a good year for this Oracle token as its general trend has been downwards, and the token has lost 27% of its value year-to-date (YTD). BAND is also down 24.2% over the past year.

The token was released via an IEO in 2019 at a price of $0.473 and made its debut trading at $0.64 per token. During the bull market of 2021, BAND hit its peak at $23.83, but since then, it has lost a whopping 95.5% of its value.

BAND is the native token of the cross-chain data oracle platform Band Protocol that aims to bring external data sourced through traditional web APIs onto blockchains.

The project was founded in 2017 by CEO Soravis Srinawakoon, CTO Sorawit Suriyakarn, and CPO Paul Nattapatsiri. In June 2020, the project officially launched the public mainnet of its blockchain in the Cosmos called BandChain, which allows for the exchange of data between different blockchains. The Chain's version 2 was released in July 2021 that allowed data providers to run nodes themselves.

Earlier this week, Band's price feed went live on the L2 blockchain Arbitrum. Last month, it introduced the ‘Pricefeed Module' for Cosmos developers to access and utilize price data from BandChain.

Its token BAND is used to secure the network through the PoS method. Every data request to BandChain requires BAND tokens in the form of transaction fees, and for fulfilling Oracle requests and producing blocks, validators, and their delegators earn a fee.

Click here to learn all about investing in Band Protocol (BAND).

Universal Market Access (UMA)

Up 1.6% in the past 24 hours, the $102.3 million market cap cryptocurrency is currently trading at $1.39. Much like other Oracle tokens on this list, UMA has had a dull 2023 except for the first week of May when its price surged more than 55%, but since then, it has lost more than half its value.

UMA was launched via an IDO on Uniswap in April 2020 at a price of about $0.26. The token is down more than 7% in 2023, in red by 53% over the past year, and has plunged 96.67% since its ATH.

UMA is the native cryptocurrency of the UMA protocol (Universal Market Access protocol) that allows users to create their own synthetic assets, which are digital tokens or tokenized assets representing real-life assets.

The project was founded by former Goldman Sachs traders Allison Lu and Hart Lambur in 2018 and is maintained by the Risk Labs Foundation while UMA Labs develops new features and works on community-led projects.

Earlier this month, the project announced oSnap, a solution to make decentralized autonomous organizations (DAOs) more cost-effective and achieve governance in a trustless and efficient manner. oSnap enables Optimistic Snapshot Execution by making use of Snapshot's gasless voting mechanism and is secured by UMA's optimistic oracle.

In June 2021, UMA launched “range tokens,” which were a synthetic financial product that allowed DAOs to raise additional funds by borrowing against their treasury. Later that year, the platform launched the Across protocol that insures transactions between L1s and L2 products.

Meanwhile, as a governance token, UMA gives holders the right to vote on proposals regarding the protocol's development as well as settle disputes related to the price of synthetic assets.

Click here to learn all about investing in Universal Market Access (UMA).

API3

As of writing, API3 is exchanging hands at $0.9256, recording gains of 0.7% in the past 24 hours but down 11.2% over the past week. The token is also down in 2023 so far by about 10% and hit its all-time low at $0.8510 recently on August 5, as per CoinGecko. The token is in red by more than 52% in the past year and further down by 90.8% from its peak.

API3 powers the collaborative API3 project, which aims to connect traditional APIs with the blockchain ecosystem.

The token is used as collateral to protect users from damages caused by dAPI malfunctions, govern the API3 DAO, and vote on project upgrades. Additionally, the API3 token is used for staking on the platform, which generates shares in the DAO through revenue sharing from the insurance service fees and produces inflationary rewards by decreasing the token's circulating supply through revenue burn from the insurance service fees.

Founded by Heikki Vänttinen, Saša Milić, and Burak Benligiray, the platform envisions decentralized APIs, called dAPI, which do not depend on third-party software and provide trustless and quantifiable security to users. Just last week, the project officially launched managed dAPIs on the API3 Market.

dAPIs will provide DeFi protocols with a more secure push oracle solution with multi-source, decentralized data feeds powered by first-party oracles.

Besides dAPIs, API3 also offers the first-party Airnode to connect API providers directly to the blockchain, QRNG services for generating truly random numbers on-chain, and OEV-Share to allow dApps to capture Oracle Extractable Value and improve protocol performance.

Click here to learn all about investing in API3. 

iEXEC RLC (RLC)

The native cryptocurrency of the decentralized computing platform iExec is also seeing a slight uptick in value and is now trading at $1.03, though the price is far off of its $15.51 peak. The $74.5 million market cap token RLC was sold in 2017 and raised $12 million. When it comes to its 2023 performance, the token has been down by nearly 15%, while its year-over-year performance is in the red by 24.6%.

iExec was founded in 2016 by Haiwu He and Gilles Fedak. A few years later, it partnered with power giant EDF, which launched a visual simulator on iExec for modeling fluids.

The platform acts like a computing power marketplace to build, deploy, and monetize dApps. It further allows developers to harness the full potential of dApp and data while enhancing privacy, retaining ownership, unlocking new connections, and earning opportunities. RLC, meanwhile, is required to use the platform and to pay for computing needs.

Most recently, iExec became a Gold Intel Partner Alliance Program member. Previously, iExec and Intel collaborated on Intel SGX hardware enclaves combined with blockchain, leading to the development of the privacy-preserving infrastructure of iExec.

This membership is just an evolution of the Intel Builders program, said iExec, as it noted, “Having previously been part of the Intel AI Builder Program, iExec already facilitates AI model renting, providing a platform for owners of valuable AI assets to monetize them while maintaining absolute confidentiality, even as their models run on any machine.”

Click here to learn all about investing in iEXEC (RLC).

Concluding Thoughts

Oracle tokens aren't really doing well, and although the entire crypto market is experiencing a downturn, the losses suffered by Oracle tokens are more severe than many altcoins. However, oracles remain the key part of the Web3 tech stack, and as these projects continue to develop and upgrade, they will continue to see adoption and have a presence in the rapidly advancing crypto sector.