The network automatically converts revenue from enterprises deploying its Oracle solutions into LINK through Payment Abstraction functions.
A week ago, we reported that Chainlink had accumulated nearly 100,000 LINK tokens for its reserve, bringing the number of tokens it holds to over 1.77 million. The project is quietly developing what might become crypto’s biggest on-chain treasury, built on real-world partnerships and solid demand for its products.
The reserve was established last year “to support the long-term growth and sustainability of the Chainlink Network by accumulating LINK using off-chain revenue from large enterprises adopting Chainlink and on-chain revenue from service usage.” It now holds 1.9 million tokens at an average purchase cost of $15.73, with the stash now valued at $16.4 million.
The latest purchase was on Feb. 5 when the Labs bought 125,454 LINK.
Commenting on the latest purchase, a representative for the company stated:
“And the best part, no withdrawals planned for years; just stacking and building.”
The reserve is an on-chain treasury, where any movement is defined by smart contracts, including dictating under what conditions funds move. With everything being documented on-chain, the reserve is fully transparent and auditable.
While it only holds $16 million worth of LINK today, the reserve could grow into one of the most formidable treasuries in the crypto sector. This is because the purchases are funded by fees from enterprises that want to use services such as CCIP, Smart Value Recapture, and other subscription services. The fees are automatically converted to LINK by the Payment Abstraction feature.
Chainlink has maintained its position as the world’s largest decentralized oracle platform. As we reported, it has enabled over $27 trillion in transaction volume and 19 billion messages. The network counts SWIFT, Euroclear, UBS, DTCC, BNP Paribas, Fidelity, Mastercard, DBS Bank, and hundreds more global giants as clients, which results in an increasing amount of revenue. This revenue is directed to the Payment Abstraction feature and ultimately will end up as LINK on the reserve.
The reserve is Chainlink Labs’ way of underpinning the network’s security. While some crypto projects build tokenomics that burn a portion of the circulating supply, the Labs uses the reserve to accumulate the tokens and use them to boost security and give the ever-rising number of institutional users confidence in the network.
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