Chainlink Decentralized Oracle Network Developers Announce Implementation of LINK Token Staking Mechanism in the second half of 2022. The team noted that the move will improve the security of the ecosystem as it scales.
“Because Chainlink is constantly integrating intonew blockchains and includes support for new oracle-based services, it is important to improve network security to keep pace with the growing amount 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 network to function properly,” the post reads.
According to the statement, the staking mechanism will achieve “four long-term goals”:
- improve network security and provide assurance to users;
- ensure the involvement of community members in the work of Chainlink;
- generate and distribute rewards for stakers;
- create a reputation structure for selecting nodes in decentralized oracle networks.
According to the developers, the first stage isthe goal is to create “a solid and simple foundation that will allow you to collect feedback.” Over time, the scope of staking will expand, and its structure will become more complicated.
In total, there are two versions of the mechanism.The release of the first is scheduled for the end of 2022. At launch, it will consist of reputation systems and notifications for staking participants. In the future, the team will enable additional features like slashing.
The initial pool of staking rewards is expected to be capped at 25M LINK. Its volume is planned to be scaled up to 75 million LINK within a few months.
Mechanism v0.1 provides for an annual remuneration of participants in the amount of up to 5%. After the launch of the next version, the staker reward will vary depending on the network fees and the asset lock-up period.
LINK quotes reacted to the developers' announcement with growth. Over the past day, the token has risen in price by 11% and, at the time of writing, is trading near $8.4.
Recall that Bank of America called Chainlink one of the drivers of growth in the volume of blocked funds in the DeFi sector.