TL;DR
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Chainlink updated its staking program, resulting in +$620M purchase in $LINK and +12% in token price.
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Chainlink wants investors to hold $LINK tokens because the more tokens held, the more value stays locked up in the ecosystem.
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So, they’re having a larger staking pool means that more of its tokens can be locked up.
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Which means there’ll be less to be sold…which means the total circulating supply will shrink…which will increase the tokens scarcity and its price (or at least that’s the idea!).
Full Story
Ready for a heap of crypto terms? Here goes nothing…
Chainlink updated its staking program, resulting in +$620M purchase in $LINK and +12% in token price.
Great – so why is this staking program getting so much attention?
Chainlink is the largest blockchain data-oracle project, which means it takes real world data, and puts it on the blockchain (e.g. weather patterns).
You might use that data like this:
You want to track Twitter trends for mentions of Ethereum → so you program Chainlink to watch it for you → tell it to purchase ETH if it starts trending → have it automatically sell it a few days later if the price of ETH is higher than you paid for it → you take home a profit.
Nice. But what does this have to do with staking??
So, Chainlink uses its own token ($LINK) to purchase and sell real world data.
In the past, most people that have been selling real world data in exchange for $LINK, have tended to sell it immediately for cold hard cash.
Cause $LINK has no clear incentive to hold it long term.
Which isn’t great for token prices! You want investors to hold these tokens – the more tokens held, the more value stays locked up in the ecosystem.
SO!
Chainlink having a larger staking pool means that more of its tokens can be locked up.
Which means there’ll be less to be sold…which means the total circulating supply will shrink…which will increase the tokens scarcity and its price.
…that’s the idea at least.
