The developers of the Chainlink decentralized oracle network announced the rollout of the LINK staking mechanism in the second half of 2022. The team noted that the move would bolster the ecosystem’s security as it scales.
Staking marks the start of #Chainlink Economics 2.0, a new era for the long-term security and sustainability of oracle networks.
In this update, we define the long-term goals, roadmap, and initial implementation of staking in the Chainlink Network.https://t.co/WJkoUzPA0i
— Chainlink (@chainlink) June 7, 2022
“As Chainlink continuously integrates into new blockchains and adds support for new oracle-based services, it is important to raise the security level of the network to match the growing volume of value in applications. […] Staking is a key mechanism that will bring a new level of crypto-economic security to Chainlink, where rewards and penalties incentivize the correct operation of the network,” the publication says.
According to the statement, the staking mechanism will achieve “four long-term goals”:
- enhance network security and provide guarantees to users;
- ensure community involvement in Chainlink’s operations;
- generate and distribute rewards for stakers;
- create a reputational framework for selecting nodes in decentralized oracle networks.
The developers say the first phase aims to create “a reliable and simple foundation that will allow feedback to be gathered.” Over time, the scope of staking applications will broaden and its structure will be made more complex.
There are two versions of the mechanism planned in total. The first release is scheduled for late 2022. At launch it will consist of reputation systems and alerts for staking participants. In the future the team will add additional features such as slashing.
The initial staking reward pool is expected to be capped at 25 million LINK. The pool is planned to scale up to 75 million LINK over several months.
Version v0.1 of the mechanism provides for annual rewards of up to 5%. After the next version launches, the staking rewards will vary depending on the network’s fee structure and the asset lock-up period.
LINK quotes reacted to the developers’ announcement with gains. Over the last 24 hours the token rose 11% and, at the time of writing, traded near $8.4.
As noted by Bank of America named Chainlink as one of the growth drivers of the volume of assets locked in the DeFi sector.
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