What is LinkPool and what are LinkPool tokens
LinkPool is a project that was born thanks to two Chainlink community members (Jonny Huxtable and Mat Beale) who started talking through the now defunct Chainlink Slack channel and realized that Chainlink staking was not going to be easy for the average Joe, due to the fact that it is much more difficult to manage a Chainlink oracle than to manage a PoS or PoW blockchain node. So they decided to come up with a project that would allow users to deposit LINK collateral on the LinkPool node in a secure and decentralized way so that they could experience the benefits of staking, without having to be exposed to most of the risks involved.
LinkPool logo
Crowdsale
Between April 15, 2018 and July 31, 2018 LinkPool opened a crowdsale to raise funds in which they offered 25% of their company for sale in the form of 1000 tokenized shares in exchange for 1000 ETH. Thanks to said crowdsale they managed to raise ~705 ETH, however they decided to proportionally distribute the "unsold” portion among those who had contributed ETH to the crowdsale. For several reasons, this token didn’t conform to the ERC20 token standard.
New winds blowing
A lot has changed since then, as last Friday, March 26th, LinkPool announced that they had redesigned both their token and their platform. You may be wondering why, and to answer that question, we should first delve into the peculiarities of this former LinkPool token. It was certainly quite particular, as its contract had integrated a biweekly airdrop mechanism, it did not conform to the ERC20 token standard, which is the most common standard within the Ethereum ecosystem.
It also presented additional problems:
- Lack of visibility within the DeFi ecosystem
- Lack of liquidity: there used to be a very feature-limited DEX as the only way to acquire LinkPool tokens.
- Lack of transparency: unless you were very familiar with reading and understanding Ethereum transactions, hashes, input data and block explorers, it was quite complex to know what was happening on-chain.
- Lack of DeFi composability: there is already an Aave proposal to include LPL as collateral. No doubt proposals to list lpoLINK -the 1:1 derivative LINK token representing your claimable rewards within the LinkPool platform- as collateral in Aave, will also appear over time.
What are LPL tokens used for?
LinkPool tokens serve two purposes:
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By staking them in the Staking Contract you are entitled to receive a percentage of the fees collected the company’s services.
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Once you stake your LPL in the Staking Contract, you will receive a LinkPool allowance token (linkLPLA) that will determine the amount of LINK you will be able to stake in the LinkPool platform once Chainlink staking goes live. The initial estimates indicate that 1 LPLA will allow you to stake 0.4 LINK, but these limits will progressively increase as LINK collateral demand grows.
Distribution
There are 100 million LPL tokens in total, out of which 75 millions are owned by the LinkPool team. However those tokens represent their main source of revenue since all the income generated by their products and services will go through the Ownership Contract, that then distributes it among all the LPL stakers.
Infographic created by the -no longer active- Twitter user CryptoSpong3 detailing the number of accounts that held LinkPool tokens on September 15, 2019.
Monetization: Products & Services
What is really interesting about the first point mentioned above and what really confers value to LinkPool tokens -as this was their original purpose- are the various products LinkPool plans to monetize, as well as those that are already being monetized. Said products & services are:
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One of LinkPool’s main fee generating services is the Chainlink node they operate. LPL stakers are entitled to receive a portion of the rewards generated by the node.
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The Staking Pool. When staking goes live, users will be able to deposit LINK in the LinkPool node and, in exchange, LinkPool will get a fee of 25% of the profit, that will also be distributed among LPL stakers.
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Chainlink’s Marketplace. There is a small subscription fee paid in LINK (but pegged to a fixed USD value) in order to list a Chainlink node. In the future they will offer premium services for those oracle operators who want to improve their performance and competitiveness against other oracles.
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NaaS (Node as a Service) , through which users will be provided with the necessary infrastructure so that their oracles are 100% ready at a technical level and the user only has to worry about managing their client portfolio, the setup of external adapters, the APIs with which they will connect in order to provide high quality data and the jobs they will offer (all through a neat User Interface). This product will require a fixed monthly / annual payment.
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Trustless staking for all, i.e. they will allow any node to become a staking pool using their security audited contracts in exchange for a percentage fee of their LINK revenue.
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When available, they will also provide ETH trustless staking and take a small fee. Once it goes live, a new LPL Allowance token will be minted for ETH (ethLPLA) that will determine the amount of ETH users will be able to stake.
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Strategies: similar to other DeFi projects, each pool will be able to deploy capital to one or more strategies. In the case of the LINK staking pools, there will be a strategy that stakes LINK into a node, then potentially other strategies that will deploy any unused liquidity into other platforms to optimise the yield of the pool, making sure no tokens are idle.
In order to estimate the revenue of staking LPL, you would have to follow this formula:
LinkPool’s revenue / total amount of LPL being staked x Amount of LPL you have staked
Infographic detailing the possibilities available to users that want to operate their own node. Created by Twitter user CryptoSpong3. You can find a higher resolution version of this infographic here.
How to acquire LinkPool tokens
Since the ERC20 token migration, the team has explicitly said that they will not pursue the listing of its token on any CEX or provide liquidity to any DEX or AMM. These types of efforts will be up to the community. So far the community has provided liquidity for several pools, the main ones are:
Given that the LinkPool token is an ERC20 token, you can store it in any ERC20 compatible wallet. Additionally, MetaMask supports hardware wallets so you will be able to store your LinkPool tokens in devices such as Ledger or Trezor. This short video might help you to understand how to proceed.
About LinkPool
LinkPool is a leading Chainlink service provider with the goal of providing tools and services that benefit the Chainlink ecosystem. Their aims include lowering the barrier to entry to staking on Chainlink nodes, easing the amount of technical experience required to run a Chainlink node, and providing smart contract creators with the tools to easily search and identify Chainlink nodes that can suit their data requirements. You can reach out LinkPool team via:
The part about LP not being ERC-20 sounds as if it will stay this way, wasn’t there an intention to convert to ERC 20 at some point because of the advantages?
