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Since September, Chainlink (LINK) price has gained more than 25%, outperforming Bitcoin (BTC), Ethereum (ETH) and most altcoins. Currently, the project is the leading decentralized blockchain oracle solution and ranks 15th in terms of market capitalization when excluding stablecoins. 

In September, LINK’s price surged by an impressive 35.5%, but in the month-to-date performance for October, LINK has faced a 10% correction. Investors are concerned that breaking the $7.20 support level may lead to further downward pressure, potentially erasing all the gains from the previous month.

Chainlink (LINK) 12-hour price index, USD. Source: TradingView

It’s worth noting that the closing price of $8.21 on Sept. 30 marked the highest point in over 10 weeks, but when looking at the bigger picture, Chainlink’s price still remains 86% below its all-time high in May 2021. Moreover, over the past 12 months, LINK has shown little growth, while Ether (ETH) gained 21.5% in the same period.

LINK marines placed all their hope on the SWIFT experiment

The LINK bull run began after SWIFT, the leader in messaging for international financial transactions, released a report on Sept. 31 titled “Connecting Blockchains: Overcoming Fragmentation in Tokenized Assets,” suggesting that linking existing systems to blockchains is more feasible than unifying different central bank digital currencies (CBDC).

Following a series of tests, SWIFT reported its capability to provide a single access point to multiple networks using existing infrastructure. This system relied on Chainlink’s Cross-Chain Interoperability Protocol (CCIP) and was said to significantly reduce operational costs and challenges for institutions supporting tokenized assets.

Part of the surge in Chainlink’s value can also be attributed to the successful testing of their Australian dollar stablecoin by the Australia and New Zealand Banking Group (ANZ) using Chainlink’s CCIP solution. In a statement dated Sept. 14, ANZ described the transaction as a “milestone” moment for the bank. Nigel Dobson, ANZ’s banking executive, noted that ANZ sees “real value” in tokenizing real-world assets, a move that could potentially revolutionize the banking industry.

On Sept. 21, Chainlink announced the mainnet launch of the CCIP protocol on the Ethereum layer-2 protocol Arbitrum One, aimed at driving cross-chain decentralized application development. This integration provides access to Arbitrum’s high-throughput, low-cost scaling solution. StarkWare, another notable Ethereum scaling technology firm, had previously utilized Chainlink’s oracle services.

Changes to Chainlink’s multisig and dwindling protocol fees reduced investor interest

However, the positive news flow was disrupted on Sept. 24 when user @StefanPatatu called out Chainlink on X social network (formerly known as Twitter) for quietly reducing the number of approvals required on its multi-signature wallet. The previous arrangement, which required four out of nine signatures to authorize a transaction, was viewed as a security measure.

Chainlink responded by downplaying the concerns and stated that the update was part of a regular signer rotation process. This explanation did not invalidate crypto analyst Chris Blec’s criticism that “the entire DeFi ecosystem can be intentionally destroyed in the blink of an eye” if Chainlink’s signers were to ever “go rogue.”

Nevertheless, Chainlink’s most significant metric, the protocol revenue generated by its price feeds, has been in decline for the past four months when measured in LINK terms.

Chainlink price feeds revenue on Ethereum. Source: Dune Analytics & @ericwallach

In September, Chainlink price feeds generated 142,216 LINK in fees (equivalent to $920,455), a 57% drop compared to May. Part of this movement can be attributed to the decline in Ethereum’s total value locked (TVL), which has decreased from $28 billion in May to its current $20 billion, representing a 29% decrease. Nevertheless, this doesn’t account for the entire difference, and could cause investors to question Chainlink’s revenue model sustainability.

Related: JPMorgan debuts tokenization platform, BlackRock among key clients – Report

It’s important to note that Chainlink offers a range of services beyond price feed generation and operates on multiple chains, including CCIP, although Ethereum’s oracle pricing services remain the core of the protocol’s business.

By comparison, Uniswap (UNI), the leading decentralized exchange, holds a market capitalization of $2.38 billion, which is 42% lower than Chainlink’s. Uniswap also boasts $3 billion in total value locked (TVL) and generated $22.8 million in fees in September alone, according to DefiLlama.

As a result, investors have reason to question whether LINK can maintain its $7.20 support level and sustain its $4.1 billion market capitalization.