stake.link, a leading delegated staking protocol for the Chainlink ecosystem, has announced its availability on the Layer 2 scaling network Arbitrum. By going cross-chain, stakeholders can now contribute to a more gas-efficient environment.
Meanwhile, Oracle’s decentralized network Chainlink has seen tremendous growth over the past year as more and more DeFi protocols rely on real-world price feeds and data to build next-generation Web3 applications. With this increased adoption comes increased demand for staking the network’s LINK token to provide security guarantees and earn rewards. However, it has become prohibitively expensive to do this directly on Ethereum due to the high gas costs. The goal is to solve this problem.
What is Chainlink?
How stake.link works
stake.link automates the delegation process, allowing token holders to earn staking rewards from topnode operators without locking their coins or running infrastructure. Users receive stLINK ERC-20 tokens representing their staked LINK, which can also be used in DeFi protocols for additional yield.
Chainlink’s board of directors approved the move to Arbitrum after community votes. Betting on the cheaper network improves the security of the ETH-USD price feed, which is currently protected by 45 million LINK.
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Arbitrum is by far the most widely used Layer 2 scaling solution, offering Ethereum compatibility at a significantly lower cost. It has seen rapid growth as projects in DeFi, NFTs and more are deployed on it.
Opportunities for stake.link
Arbitrum unlocks additional features for stake.link. Users can stake their own SDL governance token, receive NFT rewards and bridge stLINK tokens. The Protocol also plans to leverage Arbitrum’s developer grants and incentives.
While Chainlink’s proprietary staking protocol was recently updated to version 0.2, allowing previously locked tokens to be unsettled, this caused increased activity as users participated, contributing to congestion and high gas pressure on Ethereum. Arbitrum offers a viable alternative to prevent this.
As Chainlink continues to establish itself as the industry-standard oracle solution powering DeFi and Web3 apps, robust staking mechanisms are essential. The network’s services secure billions of dollars in smart contract value.
Developing adoption and improving the user experience
stake.link believes the cross-chain expansion will drive LINK staking adoption while providing a better experience for users. The protocol takes care of the technical aspects so that token holders can earn rewards in a gas-efficient manner.
Now that Arbitrum is an option, LINK staking becomes accessible to a wider audience. Stake.link plans to use the flexibility of a multi-chain approach to further grow the Chainlink ecosystem.
Conclusion
The strategic expansion of stake.link to Arbitrum represents a major milestone in the evolution of staking within the Chainlink ecosystem. It addresses the critical challenge of high gas fees on Ethereum choking the network. stake.link improves the user experience and also opens new avenues for growth and adoption. The move, which is supported by Chainlink’s board and community, underscores the protocol’s commitment to innovation and its role in securing the backbone of DeFi and Web3 applications. stake.link continues to evolve and adapt to the needs of the Chainlink community. The integration with Arbitrum is poised to promote a more accessible, secure and rewarding staking environment for LINK token holders.
