Chainlink is converting a portion of its fiat enterprise revenue into its strategic LINK reserve.
Summary
- Chainlink converts its enterprise revenue to strategic reserve
- Revenues come from both on-chain and off-chain revenue
- The move will boost demand for the LINK token
Chainlink (LINK) is jumping into treasury accumulation. On Thursday, August 7, the project introduced Chainlink Reserve to accumulate LINK tokens. Specifically, Chainlink will use both its on-chain revenue and enterprise off-chain revenue to accumulate its reserves.
Specifically, Chainlink will allocate fiat revenue collected from enterprises, including data service and maintenance fees, toward its reserve. On-chain revenue, such as usage fees and revenue sharing, will also contribute to the reserve.
These funds are processed through Chainlink’s Payment Abstraction system, which converts them into LINK tokens. The converted tokens are then deposited into the Chainlink Reserve, a smart contract deployed on Ethereum.
According to Chainlink, the reserve has already accumulated more than $1.2 million worth of LINK tokens since the early stages of its launch. Because the reserves are on-chain, they are visible on Etherscan.
What Chainlink Reserve means for LINK
Unlike most firms with strategic treasury reserves, Chainlink is not publicly traded. For this reason, its accumulation of strategic reserves does not serve the same purpose as those of Strategy and Metaplanet.
These firms hold reserves as a way to give investors exposure to the reserve assets through their shares. On the other hand, Chainlink’s move is geared toward boosting the price of the LINK token.
By converting revenue into LINK, Chainlink effectively ties its business performance to token demand. As revenue grows, so does the pressure to acquire more LINK tokens, creating additional demand and reducing circulating supply. This mechanism is expected to support upward price pressure on LINK over time.
