Your Complete Guide To: How Staking Chainlink Works?
Oracles are an important part of the ecosystem of dApps and smart contracts. Oracles like Chainlink help smart contracts on blockchain networks get data from outside sources so they can do complicated calculations. Chainlink is the most popular decentralised oracle network, which takes away the worry that a central authority could mess with how smart contracts work. The oracle network just released Chainlink Staking v0.1 in December 2022, with the goal of adding another layer of crypto-economic security to Chainlink.
Staking could give ecosystem participants a chance to earn rewards while also making sure that oracle services are more secure and trustworthy. Chainlink has started the staking project with a beta version that is still in its early stages. This version will change as more people use the network. In the next post, you’ll find a complete guide to how to stake on the Chainlink network.
How Chainlink Staking Began
Before looking for the best ways to stake Chainlink, you should consider where the project came from. Chainlink began its launch on October 3, 2022, and community members could check to see if they were eligible for staking. LINK tokens could be staked by users who qualified for early access starting on December 6, 2022.
During the early access phase, community members who are eligible can stake Chainlink tokens, also known as LINK, before the Staking Pool opens to the public. The staking pool was finally open to the public on December 8, 2022. This means that anyone can stake LINK until the first pool is full.
Another important part of the Chainlink staking for beginners guide would be to explain why the project is being done. First, it gives community members an advantage in terms of their crypto-economic value through staking rewards. Participants in the Chainlink ecosystem who work to keep the network safe might also be able to avoid worries about slashing and loss protection with staking rewards.
Staking could also be a key part of making decentralised oracle networks safer by sending out alerts when certain performance standards are met. The larger goal of staking on Chainlink is to bring attention to the fact that the truth machine runs on the support of the community.
#Chainlink Co-Founder @SergeyNazarov reflects on key milestones from 2022 and looks ahead to major growth opportunities in 2023, including the Chainlink Network monetization model, CCIP, and scaling Chainlink as a platform for off-chain computation.https://t.co/YMkeK9cUjD
— Chainlink (@chainlink) January 19, 2023
How Staking on Chainlink Can Help
When native token holders and node operators stake on Chainlink, they can earn rewards. The decentralised Oracle network handles transactions worth more than $6.6 trillion, which shows security’s importance. At the same time, securing more value in Chainlink-based applications would make the Chainlink staking ledger more secure. The staking initiative is a big step towards a new era of long-term growth and security.
In the v0.1 staking pool, community members could stake up to 7000 native tokens, or LINK. The limit makes sure that no one has to worry about a few people taking over the pool in the early stages of betting. Also, the limit on how much you can bet gives you enough room to get the level of engagement you want.
If you want to stake Chainlink, you also need to know how the tokens in the staking pool are split up. Community Stakers have been given 22.5 million LINK tokens, and Node Operator Stakers have been given 2.5 million LINK tokens. It’s also important to remember that staked tokens and rewards won’t be available until staking v0.2 is up and running.
People who want to know how to stake Chainlink should also remember that the v0.1 staking pool uses an Ethereum smart contract that doesn’t hold the stakes. So, only the person who staked them can move the staked tokens in the v0.1 staking pool. Participants who stake on Chainlink must also understand the staking pool parameters, such as the rewards for staking, the lock-up period, and the ways to get notified.
Important Prerequisites for Staking on Chainlink
In an in-depth guide to Chainlink staking, the prerequisites would be the most important part. The requirements help you figure out if you are allowed to bet on Chainlink. One of the important requirements for staking is that you must have LINK tokens in a self-custodial crypto wallet. The second important requirement points out the required amount of LINK tokens and the gas fees in ETH. Let us check the prerequisites for staking on Chainlink in detail.
The Chainlink Staking v0.1 pool is compatible with different renowned web3-based wallets. It supports popular web3 wallets, such as Metamask, WalletConnect-compatible, and Coinbase Wallet. The staking pool supports smart contract wallets, including Gnosis Safe and Agnosis. Furthermore, hardware wallets, including Ledger and Trezor, are also eligible for self-custody prerequisites of staking on Chainlink.
Minimum Requirements and Gas Fees
People seek answers to “How do you make money on Chainlink?” with the new staking protocol. However, participants must invest money before earning financial returns. The minimum requirement for staking on Chainlink is 1 LINK in your self-custodial crypto wallet.
Furthermore, you would need the required amount of ETH in your wallet for transaction gas fees. Staking involves an on-chain transaction, thereby implying the necessity of gas fees. The volatility of gas prices implies that you must verify the transaction fee before broadcasting a staking request on Ethereum.
Also, read – Chainlink: What Is It and How Does It Work On Blockchain Technology?
The different methods for staking on Chainlink provide unique approaches for driving the vision of crypto-economic security on Chainlink. Staking on a decentralised oracle network invites economic opportunities and better decentralisation and security of oracle networks. The fundamentals of Chainlink staking explained the positive aspects of staking LINK tokens in the v0.1 staking pool. Interestingly, the v0.1 staking pool is an early-stage approach of Chainlink towards staking.
The staking pool could become larger as the network grows and accommodates more community members. Chainlink plans on introducing the v0.2 staking pool in around 9 to 12 months from December 2022. However, staking on Chainlink also requires attention to specific prerequisites and parameters. Therefore, it is important to familiarise yourself with Chainlink docs related to staking and the best practices for making the most of your participation in the Chainlink ecosystem.