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What Is Chainlink?
Chainlink is a decentralized network of oracles that enables smart contracts to securely interact with real-world data and services that exist outside of blockchain networks. With Chainlink, the traditional systems that currently power modern economies can connect to the emerging blockchain industry to generate more security, efficiency, and transparency in business and social processes.
Chainlink Staking Is Not LiveChainlink Staking is still in development and has not been released, this guide is updated to reflect all publicly available information.
How does Chainlink staking work?
The purpose of Chainlink is to get real world data (like current price of gold) onto the blockchain. Someone that wants the price of gold will pay a chainlink node operator to provide it to them. When you stake Chainlink you deposit it onto a node, if the node makes money from selling data you keep a portion, if the node provides incorrect data the node will be penalized and you forfeit a percentage of your Chainlink.
What are the benefits of staking Chainlink?
When you stake Chainlink you earn a fraction of however much the node operator makes. Different node operators pay out varying amounts, nodes with more demand will generate more rewards. LinkStake is a tool that helps you effectively stake between multiple nodes.
What are the risks of staking Chainlink?
When you stake Chainlink you are putting your tokens as collateral, if the node you picked provides wrong information according to the service agreement you will lose a portion of your tokens. Since this is a new technology there may also be many unforeseen risks.
Who is eligible to stake Chainlink?
Anyone who owns the Chainlink token can stake it. Keep in mind depending on where you live staking rewards may be taxable in the form of rental or interest income. Make sure cryptocurrency is legal in your country before starting.
How to stake:
Step 1: Obtain Chainlink
First off you need to get some Chainlink. There are many ways to do this but they all involve some levels of risk. Chainlink is a risky and volatile asset and could drop in price suddenly. Additionally you need to store your Chainlink in a wallet that you control completely, such as Metamask or Ledger.
Step 2: Find & Choose a node operator
A Chainlink Node operator is an entity that provides data to the Chainlink network. An example one is Everstake, a node operator that provides the current USD price of Ethereum. Once staking is live, they will allow staking on their node. You will be able to put your Chainlink on Everstake and receive a percent of how much money they make.
Step 3: Deposit your Chainlink
Deposit your Chainlink with the node operator. The technical details for sending funds has not been described by the Chainlink team. Presumably this will require you to send your Chainlink to a Specific address
Step 4: Manage Your Funds
Over time you will most likely earn rewards, assuming the node you selected did not incur penalties. You can keep these additional funds on the same node operator or you can withdraw them. The best course of action depends on the specific node and the reward rate for new earnings.
When will Chainlink staking come out?
Like most of us, you’re probably wondering when you will be able to actually stake your LINK tokens. Although Chainlink has been released for over a year, staking functionality has not been implemented. No date has been given by the team. The Chainlink team publicly shares their development on pivotaltracker.com.
How to prepare for Chainlink staking
Here’s a few things you can do to prepare for staking:
- Withdraw Chainlink from an exchange into your own wallet
- Select Node Operators to monitor staking support
- Sign up for LinkStake early access
Once Chainlink Staking is live you’ll be able to earn Rewards with LinkStake. But we can’t let everyone in at once - join the waitlist now to secure your spot.
LinkPool Staking DApp
In order to stake LINK tokens onto a ChainLink node, we built a decentralised application (dApp) and focused on creating a clean and intuitive user interface to make the staking process easy as possible. Utilising Ethereum smart contracts to manage the staking allowed us to create a trustless system where you always have control over your tokens!
How Does It Work?
Users are required to install the MetaMask browser extension, this is used to log in to your wallet, this means we never see your private key and the authentication is handled entirely by MetaMask which also has support for hardware wallets such as Ledgers and Trezors. You will be presented with a friendly user interface that will allow you stake your ChainLink tokens onto an available node or withdraw previously staked tokens back into your wallet! You will also be able to see how many tokens you have earned as well as a full audit of your rewards, deposits and withdrawals!
Chainlink (LINK) is a decentralized oracle network which aims to connect smart contracts with data from the real world. LINK, the cryptocurrency native to the Chainlink decentralized oracle network, is used to pay node operators. Since the Chainlink network has a reputation system, node providers that have a large amount of LINK can be rewarded with larger contracts, while a failure to deliver accurate information results in a deduction of tokens.