Passive income potential is one of the most appealing aspects of the cryptocurrency world since they allow investors to easily increase their wallet size irrespective of daily price fluctuations. Chainlink (LINK), the decentralized oracle network that delivers vital off-chain data essential to the effective operation of smart contracts, is the latest crypto asset to see a price increase after unveiling the introduction of staking.
The native token of Chainlink responded significantly to the roadmap release, surging 18% on the day before retreating marginally. It is estimated that the value of the LINK token has reached its four-week high after the announcement of the staking launch in the latter half of this year.
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Goals of Chainlink Staking
A staking program is meant to fulfil four aims, according to the roadmap. The ultimate purpose of staking on the network, as per Chainlink’s statement, is “to give ecosystem participants, including node operators and community members, the ability to increase the security guarantees and user assurances of oracle services by backing them with staked LINK tokens.”
The potential of nodes on the Chainlink network to accept jobs and earn payments will be improved by staking LINK, whereas the community as a whole will benefit from an improvement in “cryptoeconomic security and user assurances.”
Apart from this, another objective of staking is to ensure increased participation of community members in the Chainlink network through the staking of LINK tokens so that performance of oracle networks can be supported. Developing and allocating rewards among the members is another goal of staking. Throughout the course, Chainlink has planned to distribute several rewards among the stakers.
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This generation of sustainable rewards from the long-term perspective will invite many investors to stake their LINK tokens. With the increase in network adoption and rise in the generation of protocol fees, a decent percentage of staking rewards will be taken from non-emissions-based sources.
Partner Growth Program is another benefit that stakers would receive in this entire program. This initiative will enhance their growth and increase cross-ecosystem participation with the help of various incentives or rewards provided by the Chainlink protocols and DAOs.
Creating a strong reputation mechanism for deciding how nodes are selected to participate in DONs (decentralized oracle networks) is the last objective of Chainlink staking. It is expected by the developers that the selection of nodes on the basis of reputation and staking will add to increased cryptoeconomic security for the end-users of Chainlink oracle services.
A Surge in the Price of LINK
After the developers revealed a plan and revealed that Chainlink 2.0 would support LINK token staking, the LINK price ended its bearish nature and surged to $9. The price of the LINK token witnessed an upsurge of about 18% soon after the details of the Chainlink Staking were released. The surge began at $7.77 and reach a high of $9 after a few hours.
Chainlink Price Chart via CoinMarketcap
At the time of writing, the price of this crypto is around $6.58, with a market capitalization of $3,073,401,956. Currently, it is ranked 22nd in terms of its market capitalization among various cryptocurrencies.
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Introduction of Proof of Reserves
Chainlink Proof of Reserves (PoR) is also included in the latest roadmap. DeFi projects can use Chainlink Proof of Reserve (PoR) to validate off-chain and cross-chain asset holdings using computerized audits based on cryptographic truth.
The introduction of Point of Reserves will ensure a higher degree of transparency in the crypto ecosystem and would help towards addressing some of the concerning issues of the present financial system in which crypto operates.
Using the help of PoR, a company’s cryptocurrency holdings may be efficiently inspected using an automated method that takes advantage of blockchains, smart contracts, and oracles’ transparency. This real-time collateral auditing works to safeguard user funds from unexpected fractional reserve techniques and other illegal conduct from off-chain custodians.
Conclusion
With the launch of Chainlink staking, the crypto world has marked the dawn of a new era in sustainable security and network economics. The first edition of the staking (v0.1) will be implemented in the second half of 2022 at an undefined date.
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The roadmap also outlined in the announcement includes plans for future expansion. The long-term goal of Chainlink staking is to “increase the security guarantees and user assurances of oracle services” while reducing the risks for community members and developing a strong foundation for a sustainable user base.
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