What is Chainlink? In simple terms: the "notary office" of the blockchain world.

Does that sound a bit abstract? Let’s start with reality.

**Where’s the problem?**

Blockchain has a fatal flaw: it only trusts what happens on-chain. But 99% of real-world information is off-chain—how much is ETH worth now, whether a loan should be liquidated, if a property transfer has been completed, what the USD interest rate is. Smart contracts need someone to relay this information. But that’s problematic.

**Why can't it do it itself?**

Try this scenario: when selling a house, the seller says, "The house is fine, I certify it myself." Do you believe it? Probably not. One person makes the call, and they have motivation to lie. If something goes wrong, you can't hold anyone accountable. Similarly, if a blockchain project feeds data into a contract itself, that’s self-certification, and nobody would trust it.

**Chainlink’s approach**

It’s not just one person’s word, but a whole mechanism: multiple independent data sources, multiple nodes, cross-verification. In the end, they collectively give a conclusion to the contract—"We all confirm, the data is valid."

What are the downsides? If a node cheats, it will be recorded, losing future earning opportunities. Even more harshly, they must stake LINK tokens as collateral—cheating means losing money. So this system isn’t maintained by morality but by economic incentives—cheat and you pay.

**The significance of LINK tokens**

Simply put: someone has to pay for maintaining the entire verification network. Nodes providing data and computing power need incentives, and cheating comes with real costs. LINK is at the core of this economic model—it’s both a payment method and a risk collateral.