Web3 Oracle Provider Offers Tokenholders Native Yields for First Time

Chainlink, the leading web3 data oracle provider, launched support for the beta version of its staking service on Dec. 6, allowing holders of its LINK token to earn a native yield for the first time.

LINK holders can now lock up the token in Chainlink’s smart contracts to back performance guarantees for the protocol’s oracle services. The beta release enabled staking to secure Chainlink’s Ethereum mainnet data feed for the price of ETH/USD.

Throughout Web3

The ETH/USD staking pool will initially be capped at 25M LINK, equating to roughly 5% of the token’s circulating supply and 2.5% of its total supply. The limit will be raised to 75M over time.

“As the network continues to expand, Chainlink Staking will continue to evolve and deliver enhanced security across our ecosystem and throughout Web3,” said Sergey Nazarov, the co-founder of Chainlink.

Chainlink is the top web3 oracle provider, relaying real-world data via more than a thousand oracle networks to web3 dApps, such as price feeds, weather data, and cross-chain communication.

Chainlink’s launch of staking services appears to be spurring investors to buy significant positions in LINK. One whale has accumulated around $100M of LINK on Binance over the last two weeks, according to Lookonchain, the on-chain data aggregator. 

It also spotted addresses purchasing $2M LINK via Uniswap. LINK has jumped 32% in the past two weeks, according to CoinGecko. 

Chainlink’s ecosystem currently spans more than 1,500 projects, including top protocols Aave, Compound, Synthetic, and dYdX. Its oracles secured $6.6T worth of transactions in 2022 so far. 

Alerting System

Chainlink represents 45% of the total value secured by oracles in DeFi at nearly $10B, according to DeFi Llama. LINK boasts a market cap of 3.6B, according to CoinGecko.

In an announcement, Chainlink said that stakers will earn rewards for participating in a decentralized alerting system that flags when the data feed is not meeting specific performance requirements regarding uptime. 

Participation in staking will initially be limited to node operators actively servicing Chainlink’s data feeds and addresses that qualify for early access, with each address capped at up to 7,000 LINK on a first come, first served basis. General public access to staking will open after two days.

Beta Staking

The Chainlink community members who are eligible for beta staking include:

• Held more than 7 LINK on Ethereum Mainnet for at least 50% of the time between May 30, 2019 and June 7, 2022. Held more than 7 LINK on Ethereum Mainnet for at least 90% of the time between August 5, 2021 and June 7, 2022.
• Community members who have hosted or spoken at Chainlink meetups
• Teams that participated in any Chainlink-hosted hackathons between Autumn 2020 and Spring 2022.

Node operators are allocated up to 3M LINK for staking combined, with Chainlink’s broader community able to fill up the remaining 22M LINK from the initial staking cap.

Chainlink said it would imminently roll out staking services as the first milestone in its ‘Economics 2.0’ roadmap during its Smartcon conference in September.

Partners

The project also announced SCALE, the Sustainable Chainlink Access for Layer 1 and 2 Enablement program, and BUILD, an initiative designed to support the development of early-stage projects.

SCALE allows partner projects to receive premium data services in exchange for covering the operating costs associated with Chainlink’s Oracle networks, such as research and development expenses, and gas fees.

BUILD similarly allows early-stage partner projects to receive premium services in exchange for pledging between 3% and 5% of their native token’s supply to Chainlink service providers, including stakers, and covering the network costs incurred by Chainlink’s oracles.