More crypto networks such as Chainlink are making the effort to become sustainable. A big part of this drive is to adopt the proof-of-stake (PoS) model. However, unlike proof-of-work which involves energy-intensive mining, PoS enables users to stake tokens to secure the network. PoS is much better for the environment because power usage is dramatically reduced.
Chainlink Staking Explained
According to the blog post, staking will bring a new layer of ‘cryptoeconomic security’ to Chainlink. Furthermore, it plans to roll out Chainlink Staking in the second half of 2022.
Therefore, last week, Chainlink unveiled its roadmap with an in-depth explanation of its Economics 2.0 model. It stated that staking was a new era for the long-term security and sustainability of oracle networks.
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
Let’s now take a deeper look at the four long-term PoS goals on Chainlink:
- Increasing Security and Chainlink Service Assurances
The primary goal involves locking up LINK tokens as a “form of service-level guarantee around network performance.” Additionally, staked LINK can be slashed and redistributed if an oracle network fails to meet its obligations, it added.
- Enabling Chainlink Network Community Participation
Chainlink wants to empower more users to participate in the network through staking. Additionally, stakers can raise alerts if they think an service is not up to standard. Node operators can also create ‘delegation systems’ as an alternative for stakers.
- Generating Sustainable Long-Term Rewards
Initial staking rewards will come from native token emissions from the LINK supply. Furthermore, this will taper off over time when other rewards such as protocol fees take over. Additionally, a Partner Growth Program (PGP) will accelerate growth and network participation. Chainlink is also considering a loss protection system for when oracles fail.
Higher Value Jobs for Node Operators
Chainlink will establish a “robust reputation framework for how nodes are selected to participate in Decentralized Oracle Networks (DONs).” This enables node operators to gain access to higher-value jobs and more fee opportunities.
On the other hand, the rollout of staking will be gradual as it did with oracle feeds. After the initial v0.1 release, slated for later this year, the roadmap has upgraded to v1 and v2. These introduce more functionality further down the line.
Chainlink Staking: two subtle points you may have missed @chainlink
A short thread about Staking from a wise anon on /biz/???? pic.twitter.com/QKKHUe2e1y
— sedys.eth (@ethsedys) January 2, 2022
LINK Price Outlook
prices got a lift after the announcement on June 8. However, they have lost all gains since then falling back 27.6% over the past week.
As a result, LINK is currently trading at $6.37, according to CoinGecko. Furthermore, the token has fallen a whopping 88% since its May 2021 all-time high of $52.70.
