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One of the key factors that have driven a rise in cryptocurrency activities over the past year is the opportunity for people to earn passive income. Passive income in the crypto sector gives investors an easy way to increase the size of their portfolios because they are promised returns without having to sell their holdings.
Chainlink is one of the oldest cryptocurrencies globally, and over the past few months, the token has witnessed a significant slump in prices, just like the rest of the market. However, with the positive developments in the market, LINK could be set for a strong recovery.
Chainlink 2.0 introduces a new roadmap
Chainlink (LINK) has reported a notable gain during the past 24 hours. At the time of writing, LINK was trading at $8.53 after a 12.4% gain, according to CoinGecko. The pump in price comes after the network announced the launch of staking opportunities.
Chainlink is a decentralized oracle network that offers off-chain data needed for the proper functioning of smart contracts. Chainlink oracle nodes have recorded a notable rise in adoption because they allow decentralized applications (DApps) to function well while giving users access to real-time data they can use to use the platforms.
One of the factors triggering interest in LINK is the launch of staking opportunities for the token. Over the past few years, Chainlink has maintained its position as the largest oracle project in the global cryptocurrency market.
The recent announcement by Chainlink said that the objective of staking on the Chainlink network was “to give ecosystem participants, including node operators and community members, the ability to increase the security guarantees and user assurances of oracle services by backing them with staked LINK tokens.”
Staking LINK tokens will increase the passive income opportunities available to users. The staking process will increase the ability of nodes to get jobs and earn fees through the Chainlink network. On the other hand, the Chainlink ecosystem will benefit from the rise in the security of the cryptoeconomy and boost user assurances.
The staking process comes with a wide range of benefits other than increasing the income avenues available to people. One of these benefits is that it will offer access to reliable data. The staking feature will also come with a penalty mechanism for the nodes not performing as expected. Underperforming nodes fail to achieve the set objectives of giving accurate oracle findings and giving them to the target destinations at the ideal time.
Chainlink is focused on community participation
One of the top advantages that will come with the launch of staking on the Chainlink network is that it will support the growth of the Chainlink community. It will allow the community to be involved in the network by staking LINK to support oracle nodes.
When the Chainlink community is supported in its growth, it will boost the network’s decentralization. It will also support a strong reputation network and prevent slashing techniques. The launch of staking on the network will also boost adoption and raise the protocol fees generated from sources that do not contribute to emissions.
Chainlink also focuses on Proof of Reserves (POR) in its new roadmap. Through PoR, cryptocurrency holdings of a company can be audited easily through automation that focuses on the transparency of blockchain, oracles, and smart contracts.
The real-time auditing of collateral protects user funds from unforeseen circumstances and fraudulent activities. PoR also boosts the level of transparency in the crypto sector and addresses one of the largest complaints about the operations of the current financial sector.
To learn more visit our Investing in Chainlink guide.
Ali is a freelance writer covering the cryptocurrency markets and the blockchain industry. He has 8 years of experience writing about cryptocurrencies, technology, and trading. His work can be found in various high-profile investment sites including CCN, Capital.com, Bitcoinist, and NewsBTC.