Chainlink Inaugurates its own Strategic Reserve

The Chainlink organization, behind the network of devolved oracles of the same name, announced the creation of a reserve in its LINK native token, funded by on-chain and off-chain income.

The Chainlink network, widely used in DeFi and corporate applications for its oracle services and connectivity between cryptocurrency networks, announced on August 7 the creation of a strategic reserve of LINK tokens, called Chainlink Reserve.

Unlike other similar initiatives driven by investors or governments, this time it is Chainlink itself that is provided with a reserve with the aim of ensuring its sustainability and expansion of its token in the long term.

This new reserve will not be financed by external issues or funds, but will feed directly on the revenue that the platform already generates, both inside and outside the chain. According to the official publication, Chainlink Reserve has already amassed more than $1 million in LINK tokens during its initial phase, and this figure is expected to increase in the coming months as more business and institutional payments are integrated into its automated conversion mechanism.

The strategy is based on the Payment Abstraction system, an infrastructure that allows users to pay for Chainlink services with stable currencies, gas tokens, or other assets. Then, those payments are programmatically converted to LINK using Ethereum’s own network services and decentralized exchanges Ethereum such as Uniswap.

This model was recently expanded to cover not only chain payments, but also off-chain revenue from large-company integrations of the traditional financial system. The goal is that most of the income – even those in dollars or other currencies – end up converted into LINK and stored in the new reserve.

The Chainlink Reserve materializes as a smart contract on the Ethereum network and does not plan to make withdrawals for several years, according to the organization. In addition, it includes security measures such as temporary blockages prior to any exit operation.

This decision by Chainlink to create its strategic reserve is part of a wider context of growing accumulation of cryptocurrencies by institutional actors, as CryptoNews has been reporting lately. Companies like MicroStrategy (now called Strategy) have made bitcoin (BTC) a corporate reserve, and investment funds are accumulating ether as a strategic asset. However, it is unusual for an organization to develop its infrastructure to accumulate its token.

According to Chainlink, its position as a leading provider of data services for decentralized finance and institutions working with tokenized assets allows it to capture value on a sustained basis. The LINK reserve would not only be a backup, but also a sign of confidence in the long-term viability of the ecosystem they have built.

With this announcement, the price of the LINK token soared rising by rising by 6% in the last 24 hours. At the time of this publication, its price is $17.62.