Chainlink Staking: v0.1 Roadmap

In our previous paper on oracles, we dove into the intricacies that make up these networks, both old and new. Among the oracles discussed was Chainlink, the decentralized oracle network whose Total Value Secured is currently sitting at $37.3bln, making it the current leader among blockchain oracle solutions by a landslide (Figure A). 

Earlier this month, there was a blog post released by Chainlink regarding the highly anticipated staking implementation. The insights included in their article cover:

This article aims to simplify the concepts mentioned in the Chainlink Staking Roadmap blog post

Staking in the Chainlink Network is a crypto-economic mechanism that aims to increase the security and user assurances of Chainlink oracle services. This is accomplished by enabling LINK tokens to be locked up and used as a type of service-level guarantee around network performance. If an oracle network breaks the terms of the SLA agreement, then a portion of the network’s stake is slashed and redistributed. 

Staking aims to empower Chainlink community members by enabling them to directly participate in securing the network alongside node operators by staking their LINK tokens. Stakers are also provided the opportunity to raise alerts and get rewarded if an oracle network does not meet its predefined performance standards. 

Various sources of rewards will be provided to stakers, with native LINK token emissions setting an initial base level of rewards. As network usage increases, a greater portion of rewards can become sourced from non-emission-based sources such as user service fees and loss protection.  

The last goal of Chainlink staking is to establish a reputation framework for how Chainlink nodes are being selected to participate in the network. In addition to performance metrics, such as response time and data accuracy, this framework will also include the amount of LINK each node is willing to stake to back their oracle services.

It’s important to reiterate that Chainlink takes a public good—data—and creates an open market for it, where nodes compete to securely relay data in return for user fees. In addition to the quality of service the node provides, the amount of revenue a node can bring in will also be tied to the amount of LINK they’re able to stake, creating a more aligned incentive structure where nodes have an incentive to compound their staking rewards.

Chainlink has long prioritized quality, security, and a long-term-oriented approach. For example, when Chainlink Price Feeds first went live in early 2019, they were rolled out in multiple phases. This began with a single Price Feed run by three nodes, and ultimately scaled to nearly a thousand Price Feeds powered by 50+ node operators across 13+ blockchains, supporting more than 1,300 projects with high-quality data and off-chain computation services. The same meticulous approach is being applied to staking. 

While there isn’t an exact date yet, staking v0.1 has an intended launch period set for later this year, with the intention of establishing a solid foundation for a robust system. Once enough data has been collected from community feedback and product usage, v1 will launch, with v2 proceeding after it. Current plans for v1 include additional functionality like expanding methods to measure node performance, distributing user fee rewards to stakers, slashing, and more. (as shown in Figure B.) 

The primary focus with v0.1 is to leverage a reputation framework and alerting system to create a robust incentive system. By incentivizing token holders and node operators to report a feed not meeting the predefined performance standards, the expected result is a system that provides the groundwork for increased security guarantees for end-users. Ultimately, v0.1 is the first stepping stone for achieving an enhanced explicit staking model via what’s described in Chainlink 2.0’s whitepaper as super-linear staking (or quadratic staking).

The Chainlink community has been waiting years for a solid roadmap and information on staking, apart from the foundations laid down in the Chainlink 2.0 whitepaper. The introduction of staking is an enormous step toward the increased reliability, scalability, and long-term security of Chainlink decentralized oracle networks. While it may be years until the roadmap is realized in its entirety, the Chainlink community has plenty of practice in applying patience to conviction.

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