Chainlink Staking: How Does the v0.2 Upgrade Improves Chainlink Staking?

Chainlink announced a v0.2 staking upgrade in August 2023, to improve its staking protocol version. The upgrade was rolled out on November 28, starting with the Priority Migration Period. Chainlink v0.2 upgrade is designed to enhance the pool capability, security, flexibility, and scope for future developments.

Meanwhile, the LINK price started to recover in Q4 2023 and is continuing its uptrend as of February 2024. It is currently trading at $17.8 with a 15% increase in the last 24 hours, as of February 02, 2024.

With its staking upgrades and real-world use cases, Chainlink seems to be a good investment to make this year. Let us learn how Chainlink staking will improve with the new v0.2 upgrade and if there are positive signs for its upward price trend.

About Chainlink Staking

The prominent oracle network on Ethereum, Chainlink introduced staking in December, 2022. Staking is one of the core initiatives of the border Chainlink Ecosystem 2.0 to improve the security of the Chainlink network.

Chainlink staking pool consisted of 20 million LINK tokens when Chainlink staking v0.1 beta version was released. It allowed community members and node operators to offer their support by staking LINK tokens and earn rewards in exchange. Locking up LINK tokens not only backup the network performance but also improves decentralization and security of the network.

However, the initial Chainlink staking v0.1 protocol didn’t get much traction and adoption from its community members. Chainlink’s LINK token performance has also been average with no significant highs or lows since the v0.1 launch.

Chainlink v0.2 Upgrade Announcement and Rollout

Chainlink announced v0.2 upgrade to its staking platform on August 25, 2023. The new upgrade launched by the end of 2023, bringing some significant changes to the Chainlink staking. The Chainlink v0.2 upgrade kept the learnings and community feedback in mind and improved upon the limitations of of its first version.

The Chainlink v0.2 launch comes out in 3 phases.

• Priority Migration Period – Started from November 28
• Early Access – Started from December 7
• General Access – Started from December 11

The Priority Migration Period helps existing stakers to migrate from v0.1 to v0.2 and this period lasted for 9 days. During the Early Access period that lasted for 4 days, all existing LINK stakers were automatically eligible for it. LINK token holders were also able to avail the early access based on certain eligibility criteria. If the v0.2 staking pool has not yet filled, anyone could start Chainlink staking during the General Access period.

How Does Chainlink v0.2 Upgrade Improve Staking?

Enhanced Accessibility

The primary improvement is the increase in capped LINK staking pool from 20 million in v0.1 to 45 million in v0.2. This accounts for an 80% increase from the initial cap so that more stakers can start participating in it.

The increase in pool size helps a diverse range of stakers to participate in the protocol. Adding to that the enhanced capability will also reduce the risk of few participants with large stakes. Thus, it improves the decentralization and helps creating a robust network.

Flexibility

The new v0.2 upgrade is bringing more flexibility and predictability for stakers to withdraw rewards. Stakers can initiate withdrawal at any time and then can claim their rewards in a 7-day period after a 28-day cooldown period completes. This was not possible in the earlier v0.1 beta version and will definitely be an attractive feature for new stakers.

New Reward System

Chainlink v0.2 upgrade introduces a new reward system that consists of Claimable Rewards and Attributed Rewards. When the ram-up period completes, stakers can withdraw their claimable rewards but not locked rewards. If they try to withdraw locked rewards they will turn into forfeited rewards.

Additionally, v0.1 has a fixed reward rate but v0.2 will have a variable reward rate. This dynamic reward system works based on how stable the staking pool is. The variable reward rate is also designed keeping the future developments of Chainlink staking in mind, where the rewards will be based on external factors.

Enhanced Security and Future Upgrades

Chainlink v0.2 upgrade also focuses on improving the network security since it is a crucial aspect of its network. The new upgrade has the ability to slash staked LINK tokens as a penalty if node operator stakers do not meet the performance requirements.

It also leaves room for future iterations without troubling stakers with migration. Moreover, the upcoming upgrades will be launched using timlock smart contracts to take time for review before implementation.

Conclusion

On another note, the LINK price has been following an uptrend since October 2023. And, it increased further with the Chainlink v0.2 upgrade announcement. With the ongoing price surge, Chainlink v0.2 upgrade seems to be going as expected by the community. However, Chainlink’s future growth and developments depends on whether the v0.2 upgrade improves the decentralization and security of the network.