- To roll out the staking, Chainlink will adopt a model of gradual scaling similar to its Price Feeds and improve upon the existing feedback.
- The initial size of the staking pool will be 25 million LINK tokens and will further expand to 75 million tokens depending on demand.
On Tuesday, June 7, oracle service provider Chainlink announced the much-awaited staking mechanism for the platform and kickstarted a new era of crypto-economy for its users. Staking has been one of the most promising reward mechanisms in the crypto space that incentivizes network supporters.
Chainlink staking will give node operators and community members the ability to increase security guarantees for the platform. The staking of Chainlink’s native crypto LINK will also enhance the ability of node operators to receive jobs and earn fees within the Chainlink Network.
Chainlink has unveiled four long-term goals with its staking mechanism. The goal is to:
- Increase Chainlink’s cryptoeconomic security and as well as user assurances of its services.
- Enable and boost community participation in the Chainlink Network
- Creation and Distribution of sustainable rewards for long-term use. Chainlink has its own Partners Growth Program (PGP) incentivizing projects benefitting from Chainlink’s security to take part.
- Empowering Node Operators to Get Higher Value Jobs by leveraging the power of staking.
The rollout and implementation of Chainlink staking
Chainlink said that its primary goal is to have a simple and secure foundation for its staking mechanism. Based on the user feedback, the Chainlink staking will continue to evolve over time expanding its scope.
Furthermore, Chainlink said that the rollout of the staking mechanism will be gradual, similar to what it did with its Price Feeds. This will help them to identify and tackle risks and opportunities at an early stage before scaling. It also said that its staking process will evolve across multiple versions.
The first version v0.1 of Chainlink staking will arrive by the end of 2022. It will focus on building a reputation framework and staker alarming system. Similarly, the second version v2 will focus on loss protection thereby protecting the participating sponsors. In the press release, Chainlink has unveiled a detailed roadmap for its staking program.
As the Chainlink network scales, the v1 version has been planned for a reputation system and shall track a greater number of metrics surrounding the performance of node operations.
How to participate in Chainlink staking?
Chainlink has capped the size of the initial staking pool in v0.1. Thus, it will have distinct allotments to community members, node operators, and the coordinator of oracle networks.
The staking pool will initially have an aggregate size of 25 million LINK tokens. However, it has a planned goal of scaling the pool size to 75 million LINK tokens, depending on the demand. Stakers who participate during the v0.1 release will have their LINK tokens locked at least until the v1 release. The press release states:
To initially fill the community alerter allotment, a fair entry mechanism will be used to help ensure participation from a wide range of community members. This entry mechanism will aim to prioritize long-term token holders, who are most likely to actively participate in the alerting mechanism.
Node operators that actively service Chainlink Data Feeds will be provided their own distinct allotments to fill. A third-party node delegation system is being explored and is currently planned to be supported in the v1 release.
In v0.1, Chainlink has planned for 5 percent as a base level of annualized staking rewards. The LINK price jumped 12 percent following the news. As of press time, Chainlink is trading at a price of $8.42 and a market cap of $3.9 billion.
Related: Chainlink was the main driver of $203B DeFi industry: Bank of America
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