FAQ
Last updated
Last updated
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Chainlink Staking is a cryptoeconomic security mechanism in which LINK token holders and node operators commit LINK tokens in smart contracts to back certain performance guarantees around oracle services.
stake.link provides users with:
A competitive reward rate
Liquid staking with the stLINK receipt token
DeFi composability with stLINK
Faster withdrawals: Up to 7 days (instead of 28 days), can be instant (assuming sufficient liquidity)
stake.link support two pool strategies, as follows
stake.link takes the following protocol fees.
Node Operators
5%
0%
SDL Stakers
15%
10%
PoL Fee (stLINK-ng)
3%
3%
Total
23%
13%
Delegation Fee
23%
13%
Core Contributors
3%
3%
Total
26%
16%
A blended reward rate takes the sum of rewards from the node operator pool (~7%) and the community pool (~4.75%) less the protocol fees.
LINK Staked
750,000
5,000,000
5,750,000
Reward Rate
7%
4.75%
5.04%
Delegation Fee
20%
10%
7.72%
Core Contributor Fee
3%
3%
3%
Yield
40,425
218,500
258,925
Yield Rate
5.39%
4.37%
4.50%
Delegated staking allows all or a portion of a node operator’s stake allotment to be fulfilled by LINK community stakers.
Third-Party Delegated staking is any form of delegated staking performed by third-parties, as opposed to through Chainlink's community pool staking.
At scale, node operators may not want, or may otherwise not have the capital, to provide the full collateral for the amount of work performed within the Chainlink network. Delegated staking allows node operators to receive pooled collateral from community stakers, allowing both node operators and the community to secure the network while sharing in the rewards.
In order for node operators to be incentivized to bring their LINK staking capacity to the stake.link platform, they must be rewarded for doing so. This is accomplished in the form of a "delegation fee" for all rewards received through the the OperatorVault for a given operator. In order for community stakers to be incentivized to supply LINK collateral to secure the network, they receive rewards after delegation and core contributor fees.
stake.link enabled a "Node Operator" strategy pool, representing the 75,000 LINK capacity each of the 15 Node Operator Participants bring to stake.link (1,125,000 total capacity).
stake.link enabled a "Community Pool" strategy pool. The community pool has a current capacity of 42.5M LINK (v.02). stake.link is increasing the allocation in this pool with the LINK available in the Priority Pool.
So, node operators bring LINK staking capacity, and perform the work of providing services via the Chainlink Ecosystem which are responsible for earning the rewards, and in return receive their portion of the delegation fee. Community stakers bring capital which helps secure the network and in return receive a share of the reward.
Both parties are necessary and require continually realigned incentives in order to ensure both the capacity and capital provision co-exist in harmony. A chief responsibility of governance is the continual review and if necessary, adjustment, to incentives to equitably incentivize both parties.
Because the node operator pool receives a higher reward rate (~7%) than the community pool (~4.75%), community stakers gain the benefit as their collateral is boosted by the node operator reward rate.
Staking through the Chainlink token will "lock" the staked tokens for a period of time. In v0.1 of Chainlink Economics 2.0, the lock period was defined as 9-12 months from December 5, 2022. In version 0.2, Chainlink is changing the lock period to instead have an unbonding period. The official communication from Chainlink as of this writing is that this is a "multi-week cooldown period". The contract specification allows for this period to be as short as 1 second and as long as 365 days.
stake.link provides two solutions to this problem:
Withdraw Capability: The Priority Pool provides a buffer such that users may withdraw their staked LINK from the protocol, enabling it to be replaced by LINK from the Priority Pool. Pending Withdrawals also provides a withdrawal request which can be processed within a week.
Liquid Staking: a receipt token "stLINK" is provided in return for staking LINK, which represents the staked amount. stLINK may be used in DeFi protocols for various features.
A receipt token is a token received in exchange for a staked token, representing the stake. stake.link mints 1 stLINK token for every 1 LINK token staked. Receipt tokens are transferable, thus creating DeFI composability.
The stLINK token is a rebasing token, which means that as your LINK rewards accrue the stLINK balance in your wallet increments up, and is backed 1:1 by staked LINK owned by the stake.link protocol. stLINK is rebasing weekly.
The Priority Pool allows users to deposit LINK ahead of additional staking capacity. When staking capacity becomes available, LINK from the Priority Pool is auto-staked, creating a 'set-and-forget' experience.
Anyone can deposit LINK to the Priority Pool.
LINK backed by reSDL will be prioritized before LINK without reSDL. Consider the following scenarios:
Person A
1
50
Person B
1
50
Person C
0
50
Result: Person A, B and C will have 50 LINK staked each.
Person A
1
50
Person B
1
50
Person C
0
50
Result: Person A and B will have 50 LINK staked each. Person C will have 0 LINK staked.
Person A
1
50
Person B
1
50
Person C
0
50
Result: Person A and B will have 50 LINK staked each. Person C will have 25 LINK staked.
Person A
1
50
Person B
1
50
Person C
0
50
Result: Person A and B will have 25 LINK staked each. Person C will have 0 LINK staked.
LINK from the Priority Pool will be staked when additional LINK staking capacity is available. This can happen in one of two scenarios:
Chainlink increases the LINK staking capacity for the node operator and/or community pools
stLINK is withdrawn from stake.link, creating more capacity
Note: the initial release of stake.link included a liquidity buffer which amounted to ~43,966 LINK. With the release of the Priority Pool, the liquidity buffer is removed. However, the LINK in that buffer remains staked. The liquidity buffer will disappaer in one of the two following scenarios: (1) LINK staking capacity is increased by an amount equal to or greater than the liquidity buffer, or, (2) stLINK is withdrawn to an amount equal to or greater than the liquidity buffer. Effectively, until LINK staking capacity is increased, stLINK may be withdrawn, but LINK from the Priority Pool will not be staked unless (a) the withdrawn stLINK amount exceeds the liquidity buffer, or (b) the LINK staking capacity increases, exceeding the liquidity buffer.
Yes, you can withdraw your LINK from the Priority Pool at any time.
No, your LINK in the Priority Pool does not earn rewards.
The amount of LINK from the Priority Pool that will be staked depends on the following factors:
The amount of LINK capacity increased that is available to stake.link
The amount of reSDL held by each depositor of LINK
The amount of LINK in the Priority Pool
At the time of writing, these variables are not yet known. As we approach closer to the increase of LINK staking capacity, a ratio will be determined for reSDL:LINK that determines how much LINK can be staked per reSDL.
No, the Priority Pool is not first come first serve. The inspiration for the Priority Pool came from the first release of LINK staking on stake.link. Holders of SDL highlighted that, due to limited staking capacity, those holders who were "online" at the time of an increase had an unfair advantage over those who may be in an unfavorouable timezone, or otherwise occupied. The Priority Pool solves this by staking all the LINK from the pool that is available, first prioritized to reSDL holders, then non-reSDL holders.
However, a SLURP (as of this writing) has been proposed that may result in SDL incentives for the first cohort of depositors to the Priority Pool.
reSDL (reward escrow SDL) is an NFT representation of SDL. The reward escrow tokenomics model ("re" model), was inspired by the vote escrow tokenomics ("ve") model designed by Curve. Vote escrow is intended to promote long term participation via boosts and governance votes.
reSDL provides three benefits to users:
Earn rewards in the form of stLINK
Priority access for LINK staking in the Priority Pool
Governance
The more reSDL a user has, the more rewards they will earn, the more LINK they will be able to stake relative to other users, and the more governance weight they will have for community votes (e.g., council elections, etc.).
To get reSDL, first acquire SDL, then stake it at stake.link. You will optionally be able to lock the reSDL, increasing the amount of reSDL received.
reSDL guarantees a position to LINK staking. In the event that reSDL holders have deposited more LINK to the Priority Pool than LINK from non-reSDL holders, only LINK from reSDL holders will be staked, and will be done so based on a ratio of reSDL:LINK that is determined near the time of the staking capacity increase.
Increase the reward rate for long-term participants
Increase staking allocations for long-term participants
Promote an increase in long-term participation.
reSDL can be optionally locked for up to 48 months. Locking reSDL provides a boost to the amount of reSDL received. The longer the reSDL is locked, the more boost is provided. The lock is set once up-front and may be done so as follows, resulting in the following boosts per lock period:
no lock - 0 multiplier
minimum 12 month lock - 2x SDL multiplier
minimum 24 month lock - 4x SDL multiplier
minimum 36 month lock - 6x SDL multiplier
minimum 48 month lock - 8x SDL multiplier
Note: the boost is in addition to the original SDL amount. If a given user holds 1000 SDL and locked for 4 years at 8x, they will receive 9000 reSDL as follows:
The VE model implements a linear decay on the lock period, resulting in less boost throughout the life period of the lock, with the maximum boost at the beginning of the lock period. Functionally, the reSDL model works the same but with a mechanical difference. reSDL receives maximum boost when initially locked. The boost is preserved through the first half of the lock period, with no available actions. Once the first half of the lock has transpired, the reSDL becomes available to "Initiate Withdraw", at which point the boost is removed, and the reSDL amount mirrors the original SDL staked amount. The reSDL will then remain locked for exactly half of the original lock, at which point it will become unlocked and able to be withdrawn. Regardless of lock, reSDL is transferable.
In practice, if reSDL is locked and requested for unlock exactly at the end of the first lock period, the boosted amount will be equivalent to the linear decay model implemented by VE. The technical reasoning for implementing lock-in and withdrawal with no linear decay is due to decay not applying until an action is performed on-chain. In the projects that implement vote escrow the decay is only applied once a transaction is sent to the platform that interacts with the contracts, if the user performs no action then the boost they receive does not decrease.
If you do not Initiate Withdraw after the first half of the lock period (e.g., when you are eligible to Initiate Withdraw), then nothing changes and you continue receiving your boost. Once you Initiate Withdraw, the boost will be removed and you will need to wait half of the original lock period before the reSDL is unlocked and able to be withdrawn.
Consider the following scenarios:
Scenario A: User locks reSDL for 48 months, receiving 8x multiplier for months 1-24. At 24 months the user becomes eligible to "Initiate Withdraw", and the user does so immediately, then for months 25-48 the user receives no multiplier. At month 48 the reSDL is unlocked.
Scenario B: User locks reSDL for 48 months, receiving 8x multiplier for months 1-24. At 24 months the user becomes eligible to "Initiate Withdraw"; however, the user take not action. The reSDL continues receiving an 8x multiplier for months 25-32. The user then initiates a "Initiate Withdraw", then for months 33-56 the user receives no multiplier. At month 56 the reSDL is unlocked.
The difference between these two examples is emphasizing the time at which the user decides to initiate an unlock request. Note that if a user does not Initiate a Withdraw at the end of their lock period they will continue receiving max boost until they Initiate Withdraw, at which point they will still have half the original lock period remaining before the reSDL may be withdrawn.
When staking SDL, reSDL is minted to the user 1:1 (however, this may be boosted based on the aforementioned lock period). This is considered an NFT "position". A user may create any number of NFT positions from their reSDL. For example:
1 reSDL (1 underlying SDL), no lock
5 reSDL (1 underlying SDL), 2 year lock
9 reSDL (1 underlying SDL), 4 year lock
At any point in time, a user may take the following actions against a position, even if locked:
Add SDL to that position (resetting the lock)
Increase the boost on that position (resetting the lock)
Upon release of reSDL, users will be required to migrate stSDL (staked SDL) to reSDL. Users are not required to lock the reSDL, and may immediately withdraw to SDL.
Additionally, users are not required to migrate all stSDL to one reSDL NFT position. Instead, users may upgrade an incremental amount of stSDL at a time until all stSDL has been migrated.
The finalized SLURP is published for voting, requiring 5 of 7 to pass, and comprised of 7 council members as follows:
3 core contributors
2 node operators
2 community members
Node Operators and Community members are elected by their representative bodies on a 6 month cycle defined as an "epoch".
All on-chain changes to protocol operations and management of treasury funds are done via our multi-sig, comprised of 6/8 signers:
2 signers from LinkPool.io 1 signer from Matrixed.Link 1 signer from LinkForest.io 1 signer from Chainlayer.io 1 signer from Galaxy Digital 1 signer from the SDL DAO (NAIL) 1 signer from Harris and Trotter
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stake.link is comprised of 15 of the top node operators in the Chainlink Ecosystem, each of which have a dedicated allocation of LINK staking that they have made available for staking on stake.link. The Node Operator pool from Chainlink earns a ~7% reward rate. To learn more about the Node Operator pool, check out the section below.
stake.link will support the Chainlink community pool as of Chainlink Economics 2.0 version 0.2. At that point in time, the total LINK staking capacity is expected to increase from 25M to 45M. The community pool will therefore be just shy of 45M (less the node operator pool allocation), and earns a ~4.75% reward rate from Chainlink. Once the staking capacity is increased, LINK from the stake.link Priority Pool will autostake to the community pool. Learn more about the below.
The implementation of locked SDL as reSDL was inspired by . The locking mechanism serves three primary purposes:
LinkPool founded stake.link and is currently the only core contributor developing the platform and underlying protocol. Since founding, stake.link has transitioned to being controlled by a DAO via a representative governance structure. Any node operator or SDL holder may propose a SLURP (stake.link upgrade request proposal) for changes and upgrades to the protocol, platform, and governance as well as incentives for the protocol as a whole.
A SLURP may be proposed by any node operator or SDL holder. This is published tofor a period of time for discourse. Any node operator or SDL holder may participate in discourse.
All on-chain actions via the multisig are subject to a .