Altcoins have seen mixed performance since the FTX crash, and many, like Chainlink, have decided to come up with their own measures to deal with the cryptocurrency’s slump. Adding staking to Chainlink was a project the company had been working on for some time, so the market reaction to its addition was long overdue. Betting on Chainlink meant a drop in the value of the asset. Many experts believe this drop is a call to buy rather than an alarm bell, so many are waiting for the effect the bets will have on Chainlink’s value.
But what are staking operations? It is a form of cryptocurrency mining that makes operations much easier for miners, allowing them to generate additional income. Basically, miners use cryptocurrencies to add new blocks to the blockchain, generating rewards much faster than traditional cryptocurrency mining. This is the new process that Chainlink has added and many are of the opinion that it is a buy the rumor and sell the news situation.
Chainlink Changes
The Chainlink blockchain opened early access between December 6th and 8th to measure the impact of this new measure on its own system. The result seems to have been a drop in the price of the asset, but even so, it is possible that the cryptocurrency controller maintains the measure mainly due to the effects that it expects staking within its blockchain. What they told the press about it was that staking would improve the overall security of the entire blockchain.
This statement makes sense, as new blocks and new nodes are added to the blockchain, the more secure the network becomes, or at least it is so in theory, as data is distributed among more users around the world. This is why Chainlink could keep the measure as a way to innovate in the Altcoin market. According to Chainlink spokespersons, those who participate in the new staking mode will receive rewards for protecting the network through timely and valid alerts.
Why experts believe that these changes can favor a growth in the value of the crypto asset is that activity on Chainlink, according to Arkham, the prestigious chain analysis company, reported an increase in activity on the altcoin blockchain.
Risks that can scare off investors
The main problem with early adoption of Staking on Chainlink is that for this, the expected emissions are 5% for community users and 7% for node users, with a commission of 0.25%. What investors fear is that Chainlink will eventually become hyperinflationary if fees are not applied to sustain rewards.
In the world of cryptocurrencies, this type of bubble tends to happen a lot, as these are not assets backed by anything physical. This is the main reason why investors fear that betting on Chainlink will tip the balance towards hyperinflation.
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