Chainlink has launched a new on-chain reserve, called the Chainlink Reserve, designed to funnel enterprise demand into its native LINK token, the company announced Thursday.
The reserve accumulates LINK using revenue from both fees paid by large institutions for Chainlink’s services and on-chain usage fees from decentralized applications, the company said in a press release, which added that the reserve is designed to support the growth and sustainability of the Chainlink Network.
Chainlink uses what it calls Payment Abstraction to let users pay in tokens like ETH or USDC., instead of requiring all payments to be made in LINK.
Those payments are then automatically converted into LINK through Chainlink’s services and decentralized exchanges. The new reserve is built entirely from those converted payments and is meant to fund long-term growth and help secure the network, according to the press release shared with CoinDesk.
The reserve already holds over $1 million worth of LINK. Chainlink said it doesn’t expect any withdrawals from the reserve for “multiple years,” and the balance is expected to grow as more enterprise revenue is directed on-chain.
“The launch of the Chainlink Reserve marks a pivotal evolution in Chainlink, establishing a strategic LINK reserve funded using off-chain revenue, as well as from on-chain service usage,” Chainlink co-founder Sergey Nazarov said in a statement. “Demand for the Chainlink standard has already created hundreds of millions of dollars in revenue, substantially from large enterprises.”
Large enterprises that have been using Chainlink’s infrastructure include Mastercard, which teamed up with the company to let cardholders buy crypto on-chain, and JPMorgan, whose Kinexys Digital Payments platform is linked to Ondo Chain using Chainlink’s technology.
Chainlink has also published a dashboard to track the reserve’s balance at reserve.chain.link, along with the reserve contract on Etherscan.