In this 🧵 I’ll break down how $LINK is rapidly evolving to become a productive asset that captures real value
2/ The economics of a decentralized Web3 services platform like Chainlink is crucial
Not only for accelerating adoption but for ensuring the long term sustainability of the network where service providers are paid for their work
3/ That last part is important, this isn’t paying value to passive actors who contribute nothing
But rather enabling service providers to get paid for the value they provide
Oracle nodes :: computation
Data providers :: data provisioning
Stakers :: cryptoeconomic security
4/ Since mainnet, the Chainlink Network has been in growth mode, deploying resources to capture market share
With market dominance established for key services like Data Feeds, the Chainlink Network is now shifting towards value capture and monetizing its network effect
The first step in accelerating value capture is increasing revenue / revenue opportunities for Chainlink service providers
Historically, revenue opportunities has been driven by the deployment of new services and supporting new chains (which will continue)
6/ In addition to increasing fees paid by existing users, new ways for pre-revenue early stage projects was needed
Such projects don’t have the resources to pay in traditional ways but they do have a lot of their own tokens
This is where Chainlink BUILD comes into play
7/ Chainlink BUILD is a new Econ2 program where projects pay a significant portion (3-5%) of their native token supply in exchange for oracle services and technical support
Such tokens can then flow to service providers in the Chainlink ecosystem like stakers
8/ More specifically, BUILD partners get access to wide range of benefits
This includes early access to beta-stage Chainlink services, custom oracle networks, and the ability to boost the security of services they use by incentivizing stakers
A win-win economic relationship
9/ As BUILD participants scale up and begin to generate their own revenue
This revenue can be shared with the Chainlink Network on a percentage point basis (or other schedule if that works better)
Revenue that can be converted to $LINK and paid to service providers
10/ As a $LINK staker, this effectively means that in addition to $LINK rewards, you’ll also have the chance to earn a basket of tokens from projects in the Chainlink ecosystem
Congrats, you’re now effectively seed investors in some of the most promising early-stage projects
11/ More info on Chainlink BUILD, including initial participating projects, can be found here blog.chain.link/chainlink-buil…
12/ COSTS
The flip side to revenue is costs, specifically operating costs
The operation of oracle networks is not free, as there are associated on-going costs like on-chain transaction (gas) fees
Minimize these costs and profit margins can increase
13/ There’s already been major strides made in this direction over time like the Off-Chain Reporting (OCR) protocol in 2021 reducing gas costs of oracle network by up to 90%
OCR 2.0 will further reduce gas costs by another 25%, allowing for even more data to be brought on-chain
14/ In parallel blockchains are finally starting to scale
As chains become more efficient, the costs for oracle networks on those chains also reduce
But that’s the beginning
This is where Chainlink SCALE comes into play
15/ Chainlink SCALE is a new Econ2 program where blockchain projects commit to offsetting the operating costs of Chainlink oracle networks on their chain
The significantly increases profit margins and eliminates the need for subsidized oracle rewards for those networks
16/ For example, @avalancheavax joined SCALE meaning Chainlink oracle networks will receive grants in AVAX to cover on-chain gas fees on their chain
This is another win-win relationship as chains need more oracle data to fuel their dApp ecosystems (as has been historically seen)
17/ Even as blockchains scale, the gas costs won’t be zero and data delivery delivery throughput is usually also increased
Chainlink SCALE covers the primary costs of oracles, meaning economic resources can be used more efficiently like driving more revenue opportunities
18/ More info on Chainlink SCALE, including initial participating blockchains, can be found here blog.chain.link/chainlink-scal…
19/ STAKING
The last major part of Chainlink Econ2 is the long-awaited staking
By locking up $LINK in smart contracts, Chainlink service providers can prove their commitment and increase the cryptoeconomic security of oracle services
20/ As explored in a June blog post, Chainlink Staking will rollout in stages and evolve with more functionalities over time
23/ Introducing staking to the most widely adopted oracle standard is no small feat, hence the progressive rollout where feedback can be incorporated before scaling up
Excited for what the future brings here
24/ To sum it up, the Chainlink Network is evolving from a growth oriented approach to growth + value capture approach:
Obligatory thread of some of my unfiltered thoughts and predictions regarding the major crypto trends this year
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• Bitcoin as a Dominant Asset Class
The catalysts for $BTC are clear; a dozen or so spot ETFs a week from approval, halving in April, multiple interest rate cuts, and fiat money printer brrrrr
Initial ETF inflows won’t be as massive as expected but will ramp up over the year
$BTC spot ETF Issuers will battle over management fees (sub 40bps fees), advertising will be strong (Super Bowl ads), and a lawsuit with the SEC over allowing in-kind issuance/redemption vs just cash
$ETH ETF will be next and then no ETFs for other tokens this year (2025 tho…)
1. Risk of staking ETH 2. Risk of liquid staking ETH 3. Risk of restaking ETH 4. Risk of liquid restaking ETH
You’re not only exposed to slashing and smart contract bug risk at each tier, but risks that only appear when composing protocols
Hell, why not take this further
Deposit your liquid restaking token into an AMM DEX, get an LP token back in return, and then deposit that LP token into a money market as collateral so you can borrow even more ETH to liquid restake
What started as a single ETH/USD Price Feed has since expanded into a fully-featured platform of services
There are now 1,000+ #Chainlink oracle networks that span external data, offchain compute, and cross-chain interoperability
A thread 🧵
Oracles connect blockchains to external systems, enabling them to execute based on inputs/outputs from the real world
Before chainlink, oracles were highly centralized and insecure, with frequent oracle attacks resulting in exploits and loss of funds
garbage in -> garbage out
Chainlink solved this problem through the creation of decentralized oracle networks (DONs), backed by strong cryptoeconomic incentives and high quality node operators
Arta TechFin, a Hong Kong-based financial services institution, is collaborating with #Chainlink Labs on the creation of regulated, fiat-based, cross-chain tokenized funds 👀
Chainlink CCIP will enable the transfer of fund tokens across public and private chains, increasing liquidity through cross-chain atomic settlement
Chainlink Data Feeds will provide transparent data for onchain Net Asset Value (NAV) reporting, making the data instantly available to all market participants
Chainlink Proof of Reserve will verify that the onchain fund tokens are backed and secured by designated assets under traditional and crypto custodians
The future is on
Arta TechFin (HKSE: 0279) is a hybrid financial (HyFi) platform bridging traditional finance with blockchain-based financial system via technology innovations
Its regulated one-stop solution enables corporates, financial institutions, and family offices to access traditional assets and digital assets
Arta TechFin, through its various subsidiaries, are licensed under Hong Kong Securities and Futures Commission
Other licenses include Hong Kong Stock Exchange participant, insurance brokerage license, trustee license and money lending license in Hong Kong as well as Eurex and Chicago Mercantile Exchange participants
@SergeyNazarov on the collaboration at @HongKongFinTech Week:
And not because of flimsy handwavey narratives or vague hyped up “connections”
But because @Chainlink has been working directly with the largest financial institutions globally on accelerating tokenized asset adoption via #CCIP
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The Society for Worldwide Interbank Financial Telecommunications (@swiftcommunity) on using CCIP for interoperability
Swift is used by 11,500+ financial institutions globally for inter-bank messaging, facilitating international money/security transfers swift.com/news-events/pr…
Participants in the Swift blockchain interoperability collaboration included 12+ of the largest financial institutions and market infrastructure providers in the world including:
Swift published a new results report about their recent collaboration with #Chainlink & 12+ of the largest financial institutions on using CCIP for blockchain interoperability 👀
CCIP connected existing Swift infra to multiple public/private blockchains
"Working with more than a dozen major financial institutions and market infrastructures and Chainlink, a leading Web3 services platform, Swift has successfully demonstrated that it can provide a single point of access to multiple networks using existing, secure infrastructure, thereby significantly reducing operational challenges and investment required for institutions to support the development of tokenised assets." - @swiftcommunity