The decentralized oracle network, Chainlink has announced the launch of Chainlink Economics 2.0, which begins with a staking mechanism.
Staking will increase the cryptoeconomic security of Chainlink by incentivizing the proper operation of the network using rewards and penalties.
Staking will also incentivize nodes to generate accurate oracle reports and deliver them to specific destinations in a timely manner.
Community members will be able to stake their LINK tokens to support the performance of oracle networks as well as raise alerts if they believe an oracle service has not met predefined performance standards.
This will increase the decentralization of the network and enable a ‘robust reputation system and slashing mechanism.’
The initial staking pool will start with an aggregate size of 25 million LINK tokens and scale to a pool size of 75 million LINK tokens in a few months.
Initially, stakers will receive a base level of annualized staking rewards of up to 5%. Later on, rewards will vary based on user fees and the length of the commitment period.
Chainlink staking will evolve across multiple versions, starting with the initial v0.1 release later this year, and its rollout will be similar to that of Chainlink’s price feeds.
The v1 version will include a reputation foundation and alerting system, as well as a reduction in stake and the inclusion of user fees as rewards in a subsequent release.
A later v2 release will introduce loss protection to help protect participating sponsors when a supported oracle network deviates from its service-level agreement.
The network benefited from the news of staking by sending the price of its native token, LINK, to a day high of $9.00 on the day of the announcement, June 7.
Read Also: Chainlink Explains its Off-Chain Reporting Technology
