Decentralized oracle protocol Chainlink (LINK) released details of its long-term goals and new roadmap on June 7, which will bring the network into the “Chainlink Economics 2.0” era.
“Economics 2.0” introduces token staking to help secure the network and reward user participation.
“Staking is a key mechanism that aims to bring a new layer of cryptoeconomic security to Chainlink, where cryptographic rewards and penalties are applied to help further incentivize the smooth functioning of the network.”
As the news broke, buyer pressure sparked a 24% rise in LINK’s price, to peak at $9.02. However, LINK was trading flat on June 8 with a slight selling bias, bringing its price down to $8.41 at press time.
A new era for Chainlink
In a tweet publicizing the matter, Chainlink said staking is the start of the Economy 2.0 era, which will bring “long-term security and sustainability.”
Staking marks the start of #Chain link The 2.0 economy, a new era for the security and long-term sustainability of oracle networks.
In this update, we outline the long-term goals, roadmap, and initial implementation of staking in the Chainlink network.https://t.co/WJkoUzPA0i
—Chainlink (@chainlink) June 7, 2022
A blog post goes into more detail mentioning four long-term goals to act as principles for success in this new phase of Chainlink development. In summary, these are:
- Increase protocol user security and assurances – networks will have to lock LINK tokens “as a form of service level guarantee around network performance”. Failure to meet SLAs will confiscate a portion of the locked token for redistribution.
- Increase community involvement — Stakeholders to monitor oracle service performance standards and be rewarded for reporting services that do not meet these performance standards.
- Generate sustainable rewards – creation and distribution of staking rewards via “native token shows” or the existing LINK offer, which will decrease over time, “user service fees” generated by payment for the use of Chainlink services, and the “Partner Growth Program” which refers to incentives from Linked Protocols and DAOs participating in the Program.
- Empowering Node Operators — introduction of a node reputation system to help inform node selection and encourage node operators to operate a reliable and secure service.
Staking to be implemented by stages of release
Chainlink’s staking rollout strategy will follow the same path as its Price Feeds rollout, which started with a single pair managed by three nodes, expanding to nearly a thousand price pairs currently managed by over 50 nodes. .
“[Price Feeds] grew from a single ETH/USD price feed on Ethereum operated by three oracle nodes to supporting nearly a thousand price feeds powered by over 50 leading node operators across twelve blockchains and Layer 2 solutions.”
A similar approach will allow for the staggered release of multiple versions, starting with the initial v0.1 release, introducing the reputation framework and alert system mentioned above.
A new roadmap shows a v1 and v2 release to follow, but no firm dates have been attached to these releases.
Chainlink said the v0.1 release will offer 5% annualized staking rewards. However, as v1 and v2 roll out, the rewards are expected to increase based on usage fees and the length of the commitment period.