The Chainlink staking protocol is not live as of yet, we are waiting for the Chainlink software to be complete, particularly regarding penalty and deposit contracts. The Chainlink team has not provided a set date or time frame. If you want to track Chainlink’s progress, you can do so here.
Introduction to the Guide
Due to the recent attention and spotlight on Chainlink and the many new Chainlink holders and supporters being created in the last couple of months, it seemed wise to write an article aimed to teach how to start staking Chainlink once it becomes possible. Looking at Chainlink’s recent pace, I will be crossing my fingers that this continues and that we will soon see full staking capabilities available.
In order for staking in Chainlink to be possible, two main aspects of the Chainlink software need to be complete, these are commonly referred to as the Penalty and Deposit contracts. These contracts allow for a specified collateral requirement and implements the ability for nodes to be punished if they don’t execute their accepted task.
Introduction to Staking
In this Chainlink Staking Guide, we will look at how you can start staking Chainlink and where. First, a quick introduction to staking and in its potential benefits.
Staking in all practical terms means that you will hold or lock your funds in a cryptocurrency wallet in support of the specific network, allowing you to receive rewards for doing so. This can be a great way not only to support a project you like and receive some benefits for it as well.
Many people are confused by staking and believe it is more complicated than it is, thus they often will only hold it in a random exchange wallet without reaping the benefits of doing so.
Some staking can be complicated, for example, if you were to run and operate a node yourself, it will require a little bit of time, hardware and you should preferably be technically inclined individual.
Fortunately, there is a second option for those who either don’t want to dedicate time or hardware or lack technical knowledge. The alternative is to use LinkPool, an easy-to-use staking platform explicitly made for Chainlink.
Granted, some exchanges like Binance have been actively trying to make this process easier in general. Unfortunately, they like other exchanges do not have a way to stake Chainlink, which means we must use other alternatives such as LinkPool.
What is LinkPool
LinkPool has created a beautiful and smooth interface that allows users to transfer and stake their LINK tokens using LinkPools well-maintained Chainlink Nodes.
The beauty of their solution is that through an Etherum smart contract that acts as the node’s wallet, you will always be in full control of your tokens and can withdraw them when you like.
Their solution was tailor-made to users who want to reap Chainlink staking rewards without having to set up and run their own node.
I want to point at that LinkPool was created right after the Chainlink ICO (initial coin offering) in 2017 and has been working actively with a large team and been heavily invested in Chainlink’s success.
It is always important when evaluating potential pool to see how trustworthy the people behind the possible pool is. In this case, it seems rather safe to choose LinkPool, as they are a serious group with long and documented background surrounding Chainlink and their LinkPool project. You can read more about the team here.
How to Stake on LinkPool
STEP 1 – Buying Chainlink (LINK) Token
Perhaps the easiest step to buy Chainlink, I would recommend buying from either Binance or CoinBase as the most accessible options as these two have the most liquidity and are historically safe and trustworthy exchanges.
If you don’t have an account at either exchange, feel free to register using the links below and receive additional benefits.
Receive a lifetime 10% fee reduction for all your trades.
I would recommend using Binance over Coinbase due to lower fees and the price on tokens tends to be priced slightly lower.
From the main menu of Binance you will be able to buy Chainlink with credit card if you don’t want to use any of your other collateral or if you don’t have any.
The process is simple and straightforward, type in your desired spending amount and you will find out how much of LINK you will be able to buy with that amount. Keep in mind that they round the number, if you click the buy button you will be taken to the next page to see the exact amount.
The fee charges for credit card is quite low compared to most other exchanges.
If you would rather buy Chainlink tokens using any of the USD linked stable-coins or bitcoin, click markets on the main menu. Once here, search LINK to get the overview you see above.
Their value is commonly attached to the USD dollar to create stability and an easy way for people to hold something like USD without the hassles of holding real fiat (traditional money).
Popular stablecoins are: USDT (Tether), USDC (USD Coin), BUSD (Binance USD), TUSD (True USD).
It is entirely the same what LINK pair you choose to buy, as LINK will be LINK no matter what you used to buy it with. LINK/USD, LINK/USDT and LINK/BTC are the most popular one and have the highest liquidity, so if you want to purchase a large amount of LINK these would be the recommended trading pairs.
STEP 2 – Set Up a MetaMask Chainlink Wallet
In order to interact with the LinkPool interface and begin staking our bought Chainlink, we need to set up an approved Chainlink wallet, we will be using the recommended MetaMask wallet.
You can go to the MetaMask website to download MetaMask as an extension to your chromium-based browser, iOS or Android.
I will be using the chromium-based extension in my demonstration, but the setup will be almost identical for the mobile apps.
When you open up MetaMask for the first time, you will be asked if you have an existing wallet you want to use or if you want to create a brand new MetaMask wallet, we will be creating a new one.
We start by creating a regular 8 character long password.
MetaMask will now automatically generate your secret backup phrase, which will consist of around 12 random words. I would recommend storing them as securely as you do with any other seed-phrases, in other words, use Bitwarden, Lastpass, Keepass, Dashlane or any other reputable password service.
I would also write them down and store them off-line in a secure location. This is my preferred solution, as I don’t like keeping such sensitive data connected to the internet in any shape or form.
Once you have secured your backup phrase, MetaMask will ask you to verify the backup phrase by making you click the phrases in the correct order.
After you have verified your backup phrase, the setup process will be complete and you can begin using Metamaks.
STEP 3 – Send Chainlink to MetaMask Wallet
We will start by clicking “add token.”
We will search for “LINK” and select “Chainlink Token,” once this has been chosen we will need to click next for it to show up in our main wallet interface.
Now that this has been prepared we will click our wallet address to copy it, then head over to the exchange or cold wallet where we keep our Chainlink. In our case, it will be Binance.
Once we find our LINK tokens in the wallet, click withdrawal.
Select the amount you want to transfer to the MetaMask wallet.
ERC-20 requires small amounts of ETH/Gas (Ethereum) when sending, a minimum of 0.005 ETH is usually recommended.
Once you have sent the LINK, it will soon arrive in your MetaMask wallet and a new value will appear.
STEP 4 – Start Staking ChainLink
Once your LINK has arrived and shown up in your MetaMask wallet, go to the LinkPool dashboard(LINK) and you will be asked for permission to connect to your wallet to LinkPool, accept.
The interface will now be updated with your current holdings of LINK tokens.
Now you have everything you need to begin staking Chainlink. Click on “Stake/Withdraw,” and a window will appear stating that staking is not yet available, as explained at the guide’s start. It will link you to the following page for more information.
The window you see is where you will be able to accept pre-existing nodes to start staking. You will also see how much you have staked on the nodes visible and their minimum staking entry.
Now you know everything you need to do once Chainlink staking goes live to participate in the staking pool, it’s straightforward and takes around 10 minutes to get set up correctly.
Alternative – Using Hardware Wallet
If you don’t want to send your LINK to the MetaMask wallet, you can connect your hardware wallet, either a ledger or trezor, to the MetaMask wallet. This way you can use your ledgers as a Chainlink wallet and still retain the ability to stake.
Once the MetaMask wallet is connected, it will be able to read your LINK tokens and manage their transactions.
Buying LinkPool Tokens
On LinkPool, there are tokens called LP (LinkPool) tokens. There are 4000 of these tokens, which distribute 25% of the revenue from LinkPool created by Node owners paying fees to LinkPool for using their infrastructure. There are some benefits besides receiving revenue, you will also be prioritized in the queue once the staking beings.
It is possible to purchase LinkPool tokens already now. They actively traded on the LinkPool interface. Click on “DEX” (decentralized exchange) to open the screen where buying and selling LP tokens takes place.
Once in the DEX, you will see all the latest trades and view how long until the next distribution in the distribution bar, it will show many LINKs out of 1000 collected and ready for distribution. Once it reaches 1000, it will start distributing the rewards to the LP token holders.
Running a Chainlink Node Yourself
It is also possible to run a Chainlink node by yourself, which you can list on LinkPool later if you desire. The process to run your own Chainlink node is a little more complicated than participating in a pool, naturally, but here are some excellent resources to start with:
A guide on how to set up a Chainlink node connected to LinkPool:
Connect Chainlink Node – LinkPool
Running a Chainlink node independently:
Keep Up to Date With the Latest Chainlink News
Aside from the progress tracker at the beginning of the guide, I will recommend some reliable sources to keep up to date with Chainlink’s newest information:
Official Chainlink Website
Official Chainlink Twitter
Official Chainlink Telegram
If you desire more in-depth technical knowledge of Chainlink in general you can read the Chainlink whitepaper here.