Chainlink, a decentralized oracle provider, faces increased competition in the oracle market despite being a long-established dominant force.
Through 2024, decentralized oracle network Pyth has grown significantly, increasing its total value secured (TVS) by a factor of 46 in nine months, from $98.4 million to $4.7 billion.
Cointelegraph contacted Chainlink for comment but did not receive a response before publication.
Chart depicting the market share of the top Oracle providers. Source: DefiLlama
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Chainlink: Leading but losing market share
Despite Pyth’s exponential growth, Chainlink retains its position as the top oracle provider as of September, securing $20.1 billion across 404 chains and a 46.46% market share.
However, when considering the oracle market leader’s position earlier in the year, a slight decline can be seen from its 48.64% market share on Jan. 1.
The combination of Pyth’s growth, Chainlink’s decreased market share, and the entry of new oracle providers is seeing Chainlink’s one-uncontested leadership slowly wear away.
In a Q&A with Cointelegraph, Michael Cahill, co-founder and CEO of Douro Labs — core contributor to Pyth network — said that Pyth “leads all oracles, including Chainlink, by total trading volume facilitated as an oracle.”
Total transaction volume of crypto derivatives. Source: Pyth Network
“Chainlink is leading in the world of lending protocols by total value secured (TVS, or oracle-powered TVL), and Pyth Network is the leader in derivatives volumes. To date, Pyth has secured over $800 billion in total traded volume on-chain.”
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Oracle market top contenders
Despite its significant growth, Pyth remains in third place with a market share of 10.79%, following WINkLink, which has a market share of 16.47% and a TVS of $7.13 billion.
WINkLink only services two blockchains — Tron and BNB Smart Chain — but retains its position due to its heavy use within the Tron ecosystem, which explains its large TVS.
Following behind Pyth is oracle provider Chronicle, with a market share of 9.05% and a TVS of $3.916 billion, which controlled the entire market until late May 2019.
Chronicle’s decentralized oracle network steadily lost its dominance over time after Chainlink knocked it out of the No. 1 spot in June 2020.
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Chainlink co-founder advocates for oracles
On June 3, the prices of multiple large-cap stocks — including Berkshire Hathaway, McDonald’s and Wells Fargo — plunged by up to 99.9% on the New York Stock Exchange due to a technical glitch.
In the aftermath, Chainlink co-founder and CEO Sergey Nazarov reminded the public of the vulnerabilities of legacy financial systems.
Nazarov told Cointelegraph then that oracle networks can “mitigate” the risks of these systems by “providing accurate, tamper-proof data.”
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