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How to Stake Chainlink in 2023
Chainlink staking doesn’t only help in ensuring the network is highly secure, but it also helps in paying node operators for their services. Most importantly, LINK holders who are staking their coins earn great rewards for helping to grow this crypto network and keeping it secure.
So, what’s Chainlink staking and how does it work? This guide aims to bring light to those in the dark regarding everything related to Chainlink staking. You can scroll down and continue reading for the definition of this concept, where, and how to do it.
- Top Chainlink Staking Platforms
- What is Chainlink staking?
- How to Stake Chainlink
- Where to Stake Chainlink
- Chainlink Staking Platforms Compared
- How Much Can You Make Staking Chainlink?
- Is There a Downside to Staking Chainlink?
- Should I Stake Chainlink?
- Final Thoughts
- FAQs
Top Chainlink Staking Platforms
What is Chainlink staking?
Chainlink staking is having your LINK tokens locked up for a certain period. It’s more like savings or a fixed investment traditional bank account where you’ve agreed with the bank to store your funds for a specific period. However, in this case, it’s LINK coins. You can choose to store a certain portion of your coins and keep them locked until the agreed date of access.
What Purpose Does Staking Serve?
Staking helps ensure that the Chainlink ecosystem grows and continues to operate securely. The staked LINK coins become part of ensuring that nodes are operated. This is to help confirm and record transactions without third-party involvement. That way, there are little to no chances of anyone altering the Chainlink blockchain and this eliminates the issue of double-spending.
How Does It Work?
When you stake your LINK tokens, Chainlink puts it to work through the Proof of Stake consensus mechanism. Your coins are used to ensure that transactions are verified. What’s in it for you, the staker? You earn staking rewards for staking your coins, which means you can end up with more LINK tokens than what you initially locked away.
Chainlink staking is unique. As well as increasing cryptoeconomic security, it also ensures the performance and accuracy of Chainlink’s oracle services. If an oracle doesn’t meet the required standards, then a portion of staked LINK can be slashed and redistributed.
What’s more, LINK holders can stake their tokens to support the performance of oracle services. If they believe an oracle hasn’t met certain performance requirements, they can raise an alert to earn a reward.
Oracles are entities that connect blockchains to real-world data. For example, an oracle might provide an ETH/USDT price feed that enables you to trade on a DeFi platform, or football match results that enable you to make bets on a crypto sportsbook platform.
Staking vs. Lending
Staking and lending are sometimes used interchangeably but they aren’t the same. However, they’re similar in that they’re both ways to earn interest on your crypto.
When you stake, you’re locking your coins up on the blockchain to support transaction validation, but they are still in your possession and the rewards are generated by the blockchain itself from new coin issuance, transaction fees, or a mixture of the two.
When you lend your coins, they are temporarily given to other users. Borrowers must pay back their crypto loans with interest, which is how lending platforms generate the interest they pay to lenders.
In terms of what’s involved for the user, staking and lending are very similar, and some platforms offer both options. However, staking or algorand staking is considered safer as you maintain ownership of your coins. It also doesn’t carry the risk of borrowers being unable to repay their loans, or the lending platform not having enough in reserve to meet mass withdrawals, which has led to a few crypto lending platforms going bankrupt in recent years.
Chainlink Staking Roadmap
Chainlink has introduced the Chainlink Staking v0.1, which is open to everyone. Holders can stake up to 7,000 LINK coins in the Chainlink community pool, which has a cap of 25 million LINK.
There are certain participation requirements for this staking community including a first-come first-serve basis. Also, you’ll be agreeing for your coins to be locked until the release of Chainlink Staking v0.2. This means that you’ll only be able to access and move your LINK tokens when they’re unlocked.
Chainlink Staking v0.1 was launched in December 2022. The period of shifting from v0.1 to v0.2 is expected to take approximately nine to 12 months. After that, Chainlink will be looking to launch v1 staking, which will introduce slashing, user fee rewards, and more data fees. The final step will be launching v2 staking, which will expand to more services and introduce loss protection.
How to Stake Chainlink
There are a few ways you can stake Chainlink tokens. Some are easier than others and we’ll talk you through the different options below.
Staking LINK on a Centralized Exchange – Easy
Centralized cryptocurrency exchanges offer the simplest way of staking because exchanges are where you can buy, sell, or exchange cryptocurrencies. On top of that, most exchanges will guide new users on how to use the platform.
Benefits of staking on a CEX
Exchanges may offer different staking products that enable you to lock up your tokens for a flexible term or for fixed terms of various lengths. Below are the benefits of staking on centralized exchanges:
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Exchanges offer various other services such as buying, exchanging, and selling crypto
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With most exchanges, you’ll earn interest for staking
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You can choose from various staking products like flexible savings and DeFi staking
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The process is quick and easy
At the time of writing, there aren’t any centralized exchanges that enable on-chain LINK staking, as the community pool is currently filled. However, LINK staking through a CEX may become possible after a future release of the Chainlink Staking program.
Joining the Chainlink Staking Community Pool Directly – Intermediate
Chainlink has launched Chainlink Staking v0.1. This is a staking pool that’s open to any LINK holder. It works on a first-come first-serve basis where each member can stake up to 7,000 LINK. The staking pool closes when the 25 million LINK cap is reached.
How the Community Pool works
Out of the 25 million LINK cap, 22.5 million is reserved for the general public, then 2.5 million is for LINK validators. The rewards and staked LINK will be locked until the release of the Chainlink Staking v0.2 pool. This is expected to take nine to 12 months from the first staking pool launch.
Your staked LINK will be locked for this period and cannot be moved by anyone. You’ll only be able to move them when they’re unlocked. This is one of the reasons it’s important to find out more about the staking pool before joining.
What you need to join the Community Pool
You should find out more about what you need to have to partake in a staking pool. For instance, before joining Chainlink Staking v0.1, your LINK coins have to be held in an Ethereum Web3 wallet. If it’s a hardware wallet, it should be supported by Web3 wallets.
Popular Web3 wallets include MetaMask, Wallet Connect, and Coinbase Wallet. Chainlink Staking v0.1 pool also supports smart contract wallets such as Gnosis Safe and Argent.
Hardware wallets that can be connected to Web3 wallets are Ledger and Trezor, to name a few.
A minimum of 1 LINK is required to stake and you must also have enough ETH to pay Ethereum transaction fees. You must also have self-custody of your LINK tokens.
We’ll take you through how to stake Chainlink with various wallets below.
Lending Chainlink on a DeFi Platform – Intermediate
Decentralized finance (DeFi) platforms provide an alternative way to earn interest on LINK and other cryptocurrencies. Through these platforms, you can deposit your tokens for other users to borrow. The interest that borrowers pay provides rewards for lenders.
To access DeFi platforms, you will need to have your tokens in a Web3-enabled wallet that you can connect to your chosen platform. We’ll walk you through the process of earning LINK interest on a DeFi platform later in this guide.
Becoming a Chainlink Node Operator – Hard
Launching a node requires one to be familiar with the Chainlink system and to have high-level technical knowledge. Since Chainlink is a decentralized network, it relies on node operators to keep the system secure, confirm transactions, and keep the system running for 24 hours a day.
Requirements for running a Chainlink node
Here are some requirements:
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A basic computer like your home desktop or laptop with 10GB of space and 2GB of RAM
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Knowledge of programming commands
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Ability to access remote databases
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Ability to set up as an Ethereum client
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Knowledge of online security principles
How to run a Chainlink node
It’s recommended that you run a Chainlink node with Docker. To give you an idea of how you can run a node for Chainlink staking, here’s a step-by-step guide:
- Download and install Docker Desktop
- Use a Docker container to run PostgreSQL, remember to create your password in the place with “mysecretpassword”
- Make sure that the container is running and accessible outside of Docker
- Run a Chainlink node by creating a local directory that’ll keep Chainlink data
- Create a node config file and add variables that are specific to the network you’re running on. Update the “CHANGEME” value to the one given to you by your external Ethereum provider.
- Create a “secrets.toml” file that has a keystore password and your database URL. Then reset the “mysecretpassword” to the one you used while running PostgreSQL. This should be a strong password as you’ll use to unlock your wallet for a keystore file generated for you.
- Now you can start the Chainlink Node by running the Docker image. Replace “” with a version you like from the Chainlink Docker hub.
- Check if the container is running and accessible outside of Docker
- Navigate to the localhost page and connect to your Chainlink node’s UI interface and secure your node.
- Finally, you can fulfill requests and complete other tasks to help verify transactions and maintain strong security.
Chainlink Staking Options Compared
Method | Requirements | Rewards | Risks |
Centralized Exchange | Join an exchange that supports LINK. Confirm proof of ID and address. Have LINK | Depends on the exchange and staking platform chosen but it’s usually around 4% | Counterparty risk |
DeFi platform | Have an Ethereum Web3 wallet or a hardware wallet that’s supported by Web3 wallets. Have custody to your LINK coins. Enough ETH to pay Ethereum fees | Varies | Smart contract vulnerability. Liquidity risk |
Node Operator | A standard computer. High technical knowledge | 7% annually | Lockup. Possible protocol security bugs |
Where to Stake Chainlink
Learn more about how to stake LINK coins on Coinbase Wallet, Crypto.com, and Ledger.
1. Coinbase Wallet – Best for Beginners
Coinbase is well-known for providing an easy-to-use crypto exchange and plenty of learning resources for beginners. But it also provides a self-hosted crypto wallet that can be used to access thousands of tokens and decentralized applications, as well as NFTs.
You can use the Coinbase Wallet to connect to the Chainlink Staking Community Pool. The benefits of choosing Coinbase Wallet for this are that it has an intuitive interface, uses industry-leading security, and can be linked to your Coinbase account, making it much easier to access and exchange your crypto.
If the Chainlink Staking Community Pool is already full, you may need to wait for a future release of the Chainlink Staking program before you can stake your LINK.
How to Stake LINK with Coinbase Wallet
Before you can get started, you’ll need to visit the Coinbase website, download the Coinbase Wallet, and transfer your LINK tokens to it.
Visit the Chainlink staking page
Head over to the Chainlink staking page at this link. Then you should click the “Connect wallet” button to get started.
Connect your Coinbase Wallet
Clicking the “Connect wallet” button will show the different wallets supported, from which you should select Coinbase Wallet. You will then be taken to a pop-up window for Coinbase Wallet, where you will need to confirm that you want to connect to the Chainlink Staking page.
Stake your LINK
Enter how much you want to stake and click the “Stake LINK” button. Then read the terms and conditions, and click “Accept and continue”. Finally, your Coinbase Wallet will pop up again and you will need to confirm the transaction in your wallet to finalize it.
2. Crypto.com DeFi Wallet – Best for Earning Interest Through Lending
Crypto.com’s DeFi wallet allows you to do LINK lending through Aave Lending V2 which is integrated into this wallet. It’s a simpler way of lending LINK tokens than doing it directly on Aave.
With this option, you won’t have to worry about admin processes like Aave smart contracts or dealing with aTokens. The Crypto.com DeFi wallet will simply display your accrued interest and enable you to easily withdraw your tokans at any time.
As well as accessing Aave, the Crypto.com DeFi wallet also enables you to browse many other apps, store NFTs, swap cryptocurrencies, and benefit from strong security.
How to Lend LINK on Crypto.com DeFi Wallet
The first thing you’ll need to do is head to the Crypto.com website, download the DeFi wallet, and buy some LINK or transfer it from another wallet.
Open Aave in the Crypto.com DeFi wallet
Open your Crypto.com DeFi wallet and tap “Earn” at the bottom. Find the Aave Lending V2 app by scrolling or using the search bar.
Deposit your LINK
Select Chainlink and enter how much of it you want to lend. Review and confirm your deposit. (You will also need to hold some ETH to pay gas fees)
Authorize your deposit and start earning rewards
You will need to enter your passcode to authorize your deposit before you can start earning rewards. Then you can go to your DeFi Earn page to see an updated list of your interest-earning assets, and click on one to see more details.
3. Ledger – Best for Security
Ledger is one of the most popular hardware wallets that enables users to store, buy, swap, and stake cryptocurrencies. It is well-known for its security as it stores private keys offline, making it invulnerable to remote hacking, unlike software wallets.
The Ledger Live app provides a way to safeguard NFTs and explore the world of dApps. The wallet’s integration with MetaMask means that you can stake the LINK on your Ledger device in the community pool.
The benefits of using Ledger instead of using MetaMask directly are a more detailed and intuitive interface, customer support, and stronger security. The downside, of course, is that you have to pay for a Ledger device if you want to enjoy these benefits.
If the Chainlink Staking Community Pool is already full, you may need to wait for a future release of the Chainlink Staking program before you can stake your LINK.
How to Stake LINK with Ledger
Before you can start, you’ll need to buy a hardware wallet from the Ledger website and create a MetaMask account.
Connect MetaMask to your Ledger device
Open MetaMask, click on your profile icon in the top right corner, and click on “Connect hardware wallet”. Choose Ledger from the available hardware wallets. Unlock your Ledger device and open the Ethereum application. Click “Connect” in MetaMask, and then choose which of your Ledger accounts you want to access and click “Unlock”.
Connect your wallet to the Chainlink Staking Community Pool
Head to the Chainlink staking website and click the “Connect wallet” button. Select MetaMask from the options, and when MetaMask opens in a pop-up window, make sure to select the account you’ve just imported from Ledger. Click “Next” and then “Connect”.
Stake your LINK
Enter how much you want to stake and click the “Stake LINK” button. Then read the terms and conditions, and click “Accept and continue”. Finally, your MetaMask wallet will pop up again and you will need to confirm the transaction in your wallet to finalize it.
Chainlink Staking Platforms Compared
Coinbase Wallet | Crypto.com DeFi Wallet | Ledger | |
🏆 Reward rate | 4.75% annually | Varies | 4.75% annually |
⌛ Payout frequency | Locked until Staking v0.2 launch | Daily | Locked until Staking v0.2 launch |
⚠️ Staking limits | 1 to 7,000 LINK | None | 1 to 7,000 LINK |
💰 Staking commission | None | 0.5% per withdrawal | None |
#️⃣ Total number of cryptos eligible for staking | 5+ directly on Coinbase, many more through dApps with the wallet | 30+ | 20+ directly with Ledger |
How Much Can You Make Staking Chainlink?
The amount of money you can make by staking Chainlink is influenced by several things. It varies based on the option you choose for staking this coin. A person staking on an exchange platform can make less than those staking directly in the community pool or operating a node.
However, other factors can affect the outcome including the rate, how long you stake for, how much you stake, and the price fluctuations of LINK. Fees can also be a factor and an issue as some node operators have complained about the high Ethereum gas fees.
At the time of writing, the stated staking reward rate for participating in the community pool is 4.75%. This means that if you staked 1,000 LINK, after a year you should have 1,047.5 LINK. Note that the reward rate may be adjusted with future releases of Chainlink Staking.
Is There a Downside to Staking Chainlink?
Before you start staking LINK coins, we’ll make you aware of some disadvantages associated with Chainlink staking.
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Slashing. The most common penalty for Proof of Stake validators that don’t meet the required performance standards is that some or all of their staked coins get “slashed”, ie confiscated, and this loss may be passed on to their delegators. However, slashing won’t be introduced until the release of Chainlink Staking v1.
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You’ll have no access to staked LINK. In most cases, you’ll be able to see the balance of your stake but can’t access or use it until the staking period is over. It’s only when that period is over that access will be enabled and your LINK coins and rewards are unlocked. This is unless you opt for the lending on the Crypto.com DeFi wallet, which enables you to retrieve your LINK tokens any time.
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Long lock-up period. The community pool Chainlink Staking v0.1 will have your LINK coins locked up for a period of between 9-12 months.
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The minimum requirements can be high. This is especially more so for community pool and node validator staking options. The community pool requires your LINK tokens to be stored on a Web3 wallet, that you have custody of your tokens, and have enough ETH to pay Ethereum fees. Then with node validating, you’ll need to have the high technical knowledge to complete the tasks, as well as 50,000 LINK.
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Price volatility is an issue for many cryptos including Chainlink. It fluctuates unpredictably and this can be a great influence on your total earnings when you come to sell your tokens. This means that you might not end up with the desired amount or at least what you calculated with the value of the LINK tokens you initially staked.
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Security is a constant issue for anything done online, specifically those that capture one’s data and funds. Even though crypto platforms and the blockchain are protected by layers of security, there’s a chance of its security being compromised, your data getting leaked, and loss of funds.
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Chainlink is not as popular as other digital currencies so it can be difficult to find it on exchange platforms, let alone staking it.
Should I Stake Chainlink?
If you’re trying to decide whether or not to stake Chainlink, then we hope that the above information has helped you get to that decision. Just like when you’re opening a fixed investment account in a traditional bank, put away a LINK value you know you can do without for a very long period.
If you’re Chainlink staking on an exchange platform, choose your products wisely by checking their reward rate, lock-up period, and other terms of use. Don’t go for an option with requirements you can’t meet or that you feel will put you at a disadvantage in the long run.
The final decision is up to you, the LINK holder, and what works for you. If you aren’t sure about that, you can consider the following before making your final decision:
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Risk vs. reward. Weigh up the reward rate and the risks detailed above, and decide whether staking fits your personal financial situation and risk tolerance.
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Are there any tax implications? With cryptocurrencies being regulated now, you have to be aware of the tax charges on crypto income in your state. This way, you’ll have an idea of the final amount you’ll receive after tax.
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Think about your technical skill level. This should help you decide whether to stake and how. Operating a node requires a lot of technical skill. If you just want to join the community staking pool, you need to make sure you understand how to set up and use a private wallet. Staking through a CEX requires hardly any skill.
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Choose a platform wisely. When choosing an exchange or wallet to buy, store, or stake tokens, do some research into its reputation, security, and regulatory status to make sure you keep your assets safe.
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There are other options. If you’re new to crypto, you can explore other options to make use of the crypto you’ve bought. These include trading, selling, lending, and other products you can partake in using exchange platforms.
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Stake what you can afford. Remember that with cryptocurrency, you should only buy, exchange, or stake what you can afford to lose. Coin prices are unpredictable and they have seasons where they drop and stay low for a while.
Final Thoughts
Chainlink staking is having your LINK coins locked up to help keep the Chainlink system secure and running smoothly. You have to be a LINK holder to be able to start staking. There are a couple of ways to stake your LINK tokens including through crypto exchanges or apps, by joining the Chainlink staking community pool, or by becoming a node.
There are a couple of cryptocurrency exchange and wallet platforms where you can stake Chainlink but the top three are Coinbase Wallet, Crypto.com DeFi wallet, and Ledger using the MetaMask app. These are regulated and available to US citizens. Coinbase Wallet is number one on the list as it’s beginner-friendly because of its simple user interface and guides.
Chainlink staking is still evolving, and we could see many changes in the future. The launch of Chainlink staking v0.2 is expected in the second half of 2023 and will enable unstaking and the potential for new stakers to join in. After that, v1 and v2 will see staking expanded across the network and the delegation, penalty, and rewards systems fully fleshed out.
FAQs
Who Can Stake Chainlink?
Anyone holding LINK tokens.
Is Chainlink Staking Rewarding?
You’ll be rewarded for staking your LINK tokens with extra LINK tokens. The fiat value of your rewards will depend on when you sell them and changes in the price of LINK.
What Options Are Available for Staking Chainlink?
You can stake your LINK tokens in the Chainlink staking community pool or by becoming a validator. You can also lend your tokens to earn interest on DeFi platforms.
Is Staking the Same as Mining?
No. Mining is the process of running hardware that competes with other computers to solve cryptographic puzzles and earn the right to validate transactions. Mining occurs on Proof of Work blockchains like Bitcoin.
Can I Unstake Chainlink?
You will only be able to unstake your LINK tokens after a future release of the Chainlink Staking program.
Is It Possible to Sell My Staked LINK Coins?
You need to unstake your LINK before you can sell it, and your staked LINK may be locked.
Is staking LINK difficult?
Joining the Chainlink staking community pool isn’t too hard, but it does require you to be able to set up and use a private wallet.
How Long Can You Stake Chainlink?
In the current Chainlink Staking model, you have no choice about how long to stake for as your LINK are locked until the next version of Chainlink Staking is released. Future models may enable you to stake for more flexible periods.