The developers of the decentralized oracle network Chainlink announced the introduction of a LINK token stacking mechanism in the second half of 2022. The team said the move will improve the security of the ecosystem as it scales.
“As Chainlink continually integrates into new blockchains and includes support for new oracle-based services, it is important to improve the security of the network to match the growing amount of value in applications. […] Stacking is a key mechanism that will bring a new level of cryptoeconomic security to Chainlink, where rewards and penalties incentivize proper network operation,” the publication said.
According to the statement, the stacking mechanism will fulfill “four long-term goals”:
– improve network security and provide assurances to users;
– ensure community members are engaged with Chainlink;
– generate and distribute rewards for stackers;
– create a reputational structure for selecting nodes in decentralized oracle networks.
According to the developers, the first step is to create a “robust and simple foundation to gather feedback.” Over time, the scope of stacking will be expanded, and its structure will become more complex.
Two versions of the mechanism are planned. The first is scheduled for release in late 2022. At launch, it will consist of reputation and notification systems for stacking participants. In the future, the team will plug in additional features like slashing.
The v0.1 mechanism provides an annual reward for participants of up to 5%. After the launch of the next version, the reward stackers will vary depending on the network fees and asset lock-in period.