Introduction

With the announcement and detail of the next iteration of Chainlink Staking, it ushers in a major iteration of stake.link. Over the past year, stake.link core functionality has been expanded upon to provide priority pooling with set-and-forget staking that benefits both LINK and SDL stakers alike. stake.link is the only platform where LINK stakers can have a liquid option for their LINK stake (stLINK) while maximising the underlying economic security of the Chainlink Network. This expansion marks the start of what will be significant platform growth.

Pool Expansion

With Chainlink Staking v0.2 comes an increase in the pool allocation from 25M to 45M LINK. For the first time, stake.link will be directing LINK collateral into the community staking allocation resulting in stLINK receiving a blended reward rate from both the community and node operator allocations.

For LINK stakers looking to take advantage of this, they can deposit an unlimited amount of LINK into the stake.link Priority Pool. When Chainlink Staking v0.2 enters Phase 3, the LINK deposited into the Priority Pool will automatically be staked based on the amount of space available, and users will be able to claim their stLINK in return. Users only have to send a single transaction to do this, and if more of their LINK is staked in the future, it’ll be automatically staked into that space without needing to spend any more on gas fees.

Priority Pool

The Priority Pool is a feature designed to give stake.link users a “set and forget” LINK staking mechanism. Any user can deposit an unlimited amount of LINK, and when LINK staking space opens up, the Priority Pool automatically stakes into the open space allowing users to then claim their portion of the stLINK in return.

With the new tokenomics as detailed and voted on within SLURP-8, users who stake and lock SDL will receive priority over users who do not. By holding reSDL NFTs in the same wallet that stakes LINK in the Priority Pool, users receive a staking allocation boost based on the amount of reSDL they have. The larger the amount of SDL staked and the longer the lock, the more reSDL a user has in return.

In addition, if reSDL holders have more LINK staked in the Priority Pool than the LINK space that’s available within Chainlink Staking, only LINK that’s backed by reSDL will be staked by the Priority Pool.

This dynamic is amplified by Chainlink Staking including native withdrawals in v0.2. For example, when native withdrawals are processed in the LINK community pool, the stake.link Priority Pool will automatically stake into that space while giving reSDL holders priority in that space. This will result in stake.link gaining a higher amount of LINK staked over time as native withdrawals are processed in Chainlink Staking, giving reSDL holders most if not all of the stLINK from that space.

Quality of Life Improvements

Migration to v0.2

All of the LINK staked through stake.link will be promptly migrated, ensuring stLINK holders staking allocation will be preserved, and requiring no action on their part. While the underlying Chainlink Staking pool goes through its iterative phases of admission, the stake.link pool, powered by the Priority Pool, will automatically allocate users’ queued LINK as availability opens up.

Unbonding and Withdrawing

For any user looking to redeem LINK from their stLINK, they can either use the existing AMM liquidity for stLINK to LINK or use the new Priority Pool mechanism for withdrawing.

The Priority Pool mechanism is designed to keep the maximum amount of LINK staked in the underlying Chainlink Staking contracts, benefiting the underlying economic security of the Chainlink Network. Rather than un-bonding the LINK from the underlying protocol, instead the stLINK is swapped for the LINK that is sat queued in the Priority Pool waiting to be staked as space opens. This is a win-win for users and the protocol alike.

Native withdrawals for LINK within stake.link will not be live on launch of Chainlink Staking v0.2 as we deem it not necessary with the Priority Pool mechanism. Once native withdrawals are supported, they’ll only be executed if there's insufficient liquidity in the Priority Pool to support the withdrawal.

Maximised Reward Rates

As detailed in the Chainlink Staking blog post, there’s multiple types of rewards based on how long a user is staked and whether they want to un-bond and withdraw their LINK collateral. Since stake.link users are provided stLINK in return for their underlying collateral, reward rates are forever maximised for stLINK holders as it is very rare that underlying LINK collateral would be withdrawn, lowering portions of locked rewards.

For the stLINK holder and stake.link user, ultimately the end result is maximised rewards while not needing to actively maintain their staked position. Any user can leverage their stLINK for potential DeFi composability opportunities in the future and further maximise reward rates on top of the base Chainlink Staking rate.

Modular Upgrading and BUILD Rewards

From inception, stake.link was architected to support the expansion of Chainlink staking and the inclusion of new services that require LINK as collateral and generate rewards for stakers and operators. Supporting staking for any new Chainlink service will be a seamless experience for any stake.link user, with stLINK automatically incorporating the additional rewards. Additionally, as new sources of rewards are integrated, depending on the asset they’re denominated in, they can either continue incrementing up the balance (or value) of stakers’ stLINK, or be distributed as airdrops for stLINK holders via the stake.link app.

Conclusion

With the expansion of stake.link, it continues to build on the foundation of it being the first-of-its-kind liquid staking platform for the Chainlink Network. The new features as detailed here will provide users with significant benefits, maximise reward rates while giving complete access and control of their underlying collateral without un-bonding periods.

We look forward to the next chapter and beyond and we invite our dedicated community to join us since they’re always a critical part of the process. As always, you can always let us know what you think on Telegram, Discord, and our Governance Forum.