LINK is the native token for the Chainlink network. It is a utility token used to incentivize data accuracy, keep contracts stable, and reward nodes for their work in validating transactions. ^[1][2]

Overview

The LINK token is an ERC-20 token based on the Ethereum network. It has an additional feature, ERC-223, which enables a "transfer and call" function for communication with smart contracts.

The Chainlink platform utilizes LINK tokens as a currency, hence, its value increases with the platform's usage, giving it more influence within the Proof of Stake network. ^[1][2]

Tokenomics

The initial coin offering (ICO) for LINK took place in September 2017 and a total and maximum supply of 1,000,000,000 LINK tokens was announced. The Chainlink price at ICO was $0.11 and a total of 350 million LINK tokens were sold to Investors.

35% of the total token supply was allocated to Node Operators and the incentivization of the ecosystem, another 35% of LINK tokens were distributed during Public Sale events, and the remaining 30% of the total token supply was directed toward the Company for the continued development of the Chainlink ecosystem and network. ^[3][4]

Utility

The LINK token serves as a means of internal payment on the network for compensating Chainlink node operators for their services. It can be utilized for staking, where node operators must stake tokens in order to participate and provide data services. Nodes with higher stakes have an increased likelihood of being selected to provide the requested data. ^[2][3]

It is also utilized for the payment for Oracle Services where the LINK tokens are used to pay Chainlink node operators (oracles) for their services, such as retrieving external data and providing it to smart contracts.

The use of LINK tokens incentivizes the accumulation of LINKs by node operators and rewards those who provide reliable and accurate data.

It is also used in contract execution, when a smart contract needs external data, the LINK token is used to pay the node operators for providing that data. ^[3]

LINK & the Chainlink Network

• Decentralized Oracle Network: Chainlink provides a decentralized oracle network that allows smart contracts to access off-chain data.
• Connecting Smart Contracts: LINK enables smart contracts to connect to real-world data, APIs, and payment systems.
• Security and Reliability: Chainlink aims to provide smart contracts with secure and reliable data feeds, ensuring the accuracy and integrity of information used by smart contracts.
• Oracle Selection:bUsers can specify their data requirements and Chainlink uses this information to match them with suitable oracles.
• Order-Matching Contracts: A user can deposit their LINK tokens in an Order-Matching contract, which then accepts bids from oracles to provide the data. ^[2]