Last year CL nodes made about $160mm in link node payment fees. This doesn't include arbitrum fees which are now ~7mm txns at mean of ~$5 per over the last 10 months (with a clear uptrend) = 35mm * 0.15 = ~5mm There's been continued growth of total node revenue as evidenced by linkpool payouts.
Add to that two overhead reductions: Use of CCIP to make link payments over arbitrum rather than eth, saving eth Use of VRF 2.0 which decreases eth gas use for VRF by 60%
Even in the absolute worst case scenario (where the "node incentivization fund" is fully used to fund CL development now that nodes are profitable) chainlink will launch with staking APR's that are highly attractive and only likely to grow on a per-link basis (as link is not inflationary)
Let's put staking in the middle of 2022 and give continued growth of fee generation from last year plus a modest 25% profit increase from the overhead reductions above You're looking at ~700mm in fees generated during the subsequent year. Currently there are 115mm link on exchanges and 467mm total circulating. If that total is 500mm by staking you're going to have parity across all of the link uses currently (lending protocols, AMMs, CeFi MMs etc.) with some also needed for node payment liquidity, leaving maybe 250mm staked on nodes. Even in this worst case scenario you're looking at almost $3 per link per year in passive income to share between node and staker. At current price this is almost 20% APY.
More likely the node fund will be added revenue on top. Of course no stable high quality APY will ever stay above 10% so likely the price (with zero speculative addition on top) would be in the high 2 digits low 3 digits. If that node fund is allocated as a payment to existing nodes to bootstrap the network, you're looking at $200-400 per link with 5-10% APY.
And every year more users use the network, moore tech comes out to drop overheads and more fee-generating offerings get added to nodes.
There won't be a singularity like you think there will. People aren't smart enough to actually fomo on the project they should. But there will be a 3-7 year period where link does literally nothing but go up, generate more passive income and gain notoriety.
Kevin Nguyen
Eth not needed. Shits getting serious.
Landon Jones
Did you know Arbitrum was supposed to be its own blockchain?
This is actually bad news because then your passive gains per link will drop
Henry Adams
son of a bitch, this picture is like a stab to the fucking heart every time I see it. I really gives me this impulse to market sell all my link just to make sure I'm never accidentally associated with a couple of baboons like that.
Ian Garcia
have you seen the one with all the whores?
Andrew Perez
>There won't be a singularity like you think there will. People aren't smart enough to actually fomo on the project they should. But there will be a 3-7 year period where link does literally nothing but go up, generate more passive income and gain notoriety. which is fine for anyone with at least 10k LINK. Getting an APY of even 3% would make you comfortable when LINK hits 100, let alone 200 USD per LINK. If it's actually 5-10%? Well shit you are retired if you don't live in an overpriced city, and you have an excellent second income if you do.
Jack Phillips
Where are you getting your numbers because my math says $15 Link with 2.36% APY
Matthew Long
Pic plz
Adrian Johnson
Sterling work, sir. Wagmi for sure. You reckon 3 digits this year?
Jace Harris
>and give continued growth of fee generation from last year This is a completely unreasonable assumption. Last year was probably the local top for the next few years. Think the US tech sector in 1999
Kevin Edwards
Could you explain how you got the 700mm in fees generated? Is that a projection based on the past months? What does mm mean millions?
One thing which is still unknown is how many contracts will require staking. For example you probably don't need staking for a random number generator for a low level product. But for the Arbitrum infrastructure and CCIP you will be forced to use it in order to ensure the best safety and security standards.
The issue in this is that a node operator wants to remain profitable. This means that their goal is to keep as much of the income as possible, and they would be reluctant to use staking for things that don't require it and would also want to decrease its cost by either buying the LINK token for their own use or borrowing it from a platform like AAVE if the rate is lower than what they can get on their own.
From this point of view it's easy to see a high value for Linkpool and a high earned income as they will keep most of the profits and are already well established to profit from this. However LINK is a passive collateral, and as such it will obey different rules and will be more affected by the Netcalfe law and the global growth and usage of the network and the behavior and expectations of its participants. Node owners will keep accumulating LINK expecting the price and their staking collateral requirements to go up which should add more buying pressure for example.
The real question I would like to understand is what the profit distribution of a node will be in regards to what will remain as income for the node operator and income for LINK lenders. Here I have absolutely no clue how to see this, but node operators may not see this as a good thing depending on how it's done. If they are forced to use it on their existing contracts and it eats 25% of their revenue they won't like it, but they already went through something like this when Chainlink reduced their node incentives last year.
Grayson Watson
Thanks for a not shit thread OP
Heres another crumb to get your noggin joggin Because Sergey's now cleared up that node jobs are in proportion to node stake, theres no reason for nodes to not accumulate as much link as possible so long as theyre getting apys above what their time value of money is (as its pure profit if youre running a node). Node operators are now big companies and telcos with access to cheaper money than a mortgage, so dont expect any yields to ever exceed that level.
You of course wont care that youre only getting 3-4 percent because link will be 750 a token by then with an iron floor made up by autobuying/staking of every node on the network with access to capital.
Jaxon Torres
Retard fucking take.
Angel Brooks
However if we see things like the node operating costs caused by ETH gas fees being reduced by 20-60% then adding staking costs would still improve the node operator profitability and everyone would win in this scenario. This is likely the option Sergey chose and why the staking release came later in order for this profitability to remain.
Andrew Brown
DR;NB
Oliver Moore
everyone is going to be flocking to LINK once this bear market finally comes upon us. all the yield farming ponzis are going to 0 because thats true value of their ponzi tokens. >inb4 token not needed it literally doesnt fucking matter if you think the link token is needed or not. the sad reality for you is that if you want to use chainlink services (you have to to do anything on any blockchain at this point), you have to pay the node operators in the link token. dont like it? tough shit, chainlink has a monopoly on oracles, they make the rules, not you.
the other beautiful thing is that its not going to matter whether we are in a bear market or not. you need to understand all the projects getting attention right now exist for 1 purpose - to steal retail money. when retail money disappears, so do these projects.
Chainlink will continue onboarding corporate entities to run nodes and integrate with the network regardless of the market conditions. We will be the only game in town, its that simple. i want you to imagine yourself taking a cut of a price feed updated ever 10 blocks, or every single message from SWIFT to Corda, ETH, Polygon. It's literally a money making money and you're about to be front run by the largest banks in the world, forever missing your shot at making it.
check em
Eli Nguyen
Could you explain how to calculate the link node payment fees made in a year? Is there a metric of this somewhere?
Ethan Morales
>Retard fucking take. I fuck your mom so TECHNICALLY I am a retard fucker, but besides that would you mind explaining why you don't think that's reasonable?
