Chainlink highlights Proof-of-Reserve as Social Volume spikes: LINK to rise next?

  • 25 January 2023, Wednesday, 04:35
Chainlink highlights Proof-of-Reserve as Social Volume spikes: LINK to rise next?
Source: Unsplash

Chainlink saw a spike in its Social Volume recently, taking it to the highest in over six months. LINK saw a higher average number of Daily Active users in January.

In a post on 23 January, Chainlink [LINK] highlighted the Proof-of-Reserve (PoR) and its advantages. Because of the FTX crash in 2022, the concept gained widespread attention.

Gold, currencies, real estate, and commodities are collectively worth over $40 trillion. But only ~$200 billion of that is represented on-chain in a trust-minimized and tokenized form.

That's just 0.5% of the addressable market.

Enter #Chainlink Proof of Reserve (PoR).

— Chainlink (@chainlink) January 22, 2023

After the failure of the second largest exchange, Binance’s Chanpeng Zhao led the call for the publication of reserves by all crypto exchanges. Chainlink’s PoR post went viral because it addressed a highly topical issue in the cryptocurrency industry.

Chainlink‘s Proof of Reserve is a distributed oracle service that can validate the reserves of a smart contract. To do this, the smart contract requests the current balance of a specified account from the Chainlink network and compares it to the balance defined in the contract.

This adds credibility to the smart contract by verifying that it owns the assets it states it does. Having been in development for some time, Chainlink finally released its Proof of Reserve services in late 2020.

Social Volume responds massively

Santiment’s data suggested the PoR post struck a chord with the crypto community, leading to a surge in the conversation and interest in Chainlink. By 23 January, the Social Volume metric surpassed 37,000. This was the most significant level that the metric had been at in over half a year, making it rather outstanding.

Source: Santiment

The social volume metric is used in the crypto space to describe the level of discussion and interaction surrounding a given coin/token on various online discussion boards and social media channels. The level of interest and enthusiasm about a cryptocurrency may be gauged by looking at its social volume. The metric could then be utilized to make price predictions for Chainlink.

Active Users LINK up

The number of Chainlink users increased significantly in January, according to an analysis of the Daily Active Address metric. As of this writing, the metric was over 200, with over 800 users on the previous day. Even though there were minimal surges in the preceding months, January had more active users overall.

Source: Santiment

A possible future increase if…

The daily timeframe chart of LINK provided a clearer picture of LINK’s recent increasing trend. Even though LINK has been on the rise, it seems to be trying to consolidate at the price it was at. Between $6.62 and $6.67, it seemed as though a support level was developing. It was trading at roughly $7.14 as of the time of writing, up more than 2% from the observed trading period.

Source: Trading View

A steady increase in social volume would increase awareness of the token. Increased interest might result in more engagement with the project, which would be beneficial for LINK.

The Directional Movement Index (DMI) indicator showed that LINK was in a bull trend. Moreover, the bullish trend of the asset was indicated by the plus DI and the Signal line of the DMI being above 20.

Read the best crypto stories of the day in less than 5 minutes Subscribe to get it daily in your inbox. Please select your Email Preferences. The Daily Digest The Weekly Digest

Source: ambcrypto.com