Chainlink Staking: two subtle points you may have missed @chainlink
A short thread about $LINK Staking from a wise anon on /biz/👇🧵
A short thread about $LINK Staking from a wise anon on /biz/👇🧵
1/ "When @SergeyNazarov discusses Staking as part of how nodes offer security guarantees beyond traditional IT security best practices, he specifically references proportional allotment of fees and future fees in proportion to amount staked.
2/ He then goes further and explicitly states that reputation (in terms of jobs completed and job value completed) will be downstream of staked value. More staking means more jobs which means better reputation and more jobs/fees.
3/ This puts to rest one of the actually high IQ pieces of FUD about @chainlink: that Superlinear Staking would render the amount a node would need to stake at some low figure.
4/This is now irrelevant: even if the node only needs to stake 1 $LINK to get a billion dollar job, they'll be competing for a proportion of that stream with nodes with hundreds of thousands of $LINK staked (and only getting 1/100,000th of the fee volume).
5/ Going a step further, one of the fever dreams of Assblaster is actually likely to come true:
6/ We know now that at least some nodes are profitable in the current environment, without significant #CCIP volume and without significant @arbitrum use/fee collection.
7/ All of those factors above increase profitability by at least an order of magnitude. This is the golden ring that Sergey dangled in front of @deutschetelekom, @Swisscom, etc...
8/ But remember that every one of those node operators have contemporaries (@Verizon, @ATT, etc ...) that will also scramble to tap into this new revenue stream with their existing data and security infrastructure.
9/ And the only way they can “break into” the fee streams as a new node is to offer a higher stake than the existing, higher reputation nodes. market.link/search/nodes
10/ In other words the thing that will push $LINK to truly high valuations will, in fact, be institutions buying your bags.
11/ On to point two:
12/ When Sergey talks about how staking will roll out he first goes over how many POS networks are over 50% incentive with user fees making up only a small portion of revenue. He initially did this to draw a contrast with the now-profitable nature of certain $LINK nodes.
13/ But there's also an implication for the launch of staking if you listen to how he describes it as “node staking and staking rewards”. Specifically node rewards have thus far been subsidizing non-profitable nodes so that the network exists.
14/ But if nodes are profitable there are really only two kinds of node incentivization left to do: things like hackathon prizes and community grants and things like direct node payment subsidies.
15/ Since fees will be allotted proportionally to $LINK staked, existing tokens in wallets effectively “owns” a portion of that future node incentivization fund, similar to how @CurveFinance give $CRV rewards to their LPs (some of whom stake $CRV as part of their liquidity).
16/ Put bluntly, every $LINK you own right now will be asymptotically worth 1/1,000,000,000th the current and future fees of the entire @chainlink network plus about 50% in node reward incentive (paid in $LINK) once staking goes live.
17/ The pumpamentals here are top notch. We'll see how long it takes the useful idiots of crypto to pick up on all of this, but this announcement was as good as it possibly could have been for the future value of $LINK.”
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