Cryptocurrencies are powered by blockchains, software that runs across a decentralized network of computers, enabling transaction data to be validated, recorded, and protected from attack. Platforms like Ethereum extend that functionality, allowing developers to build self-executing computer programs on the blockchain.

Those programs are called smart contracts, and they form the heart of decentralized finance (DeFi) applications, products that allow users to access financial services without going through a bank or other intermediary. And by eliminating the middleman, DeFi applications have the potential to make the financial system more accessible, less biased, and cheaper.

Ethereum is currently the largest DeFi ecosystem, with $175 billion locked (invested) in various DeFi products. And with a market value of $518 billion, it’s also the second-most-valuable cryptocurrency by a long shot. But while Ethereum still looks like a smart investment, it may offer less long-term upside than some smaller cryptocurrencies. For instance, Chainlink (CRYPTO:LINK) has a market value of just $13 billion, but it plays a critical role in DeFi. Here’s what you should know.

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Making smart contracts more useful

Chainlink is a decentralized oracle network powered by LINK,