I’ve been dubious about this graph on the Chainlink staking rewards page for years. Because it’s such an oddly specific and visually unattractive thing to prominently display that I’ve always wondered why would you display that at all? The graph shows the variable reward rate for v0.2. The basic mechanism is simple A fixed amount of $LINK rewards is distributed across the LINK being staked Less LINK staked means higher reward rate. More LINK staked means lower reward rate. Today the community pool is effectively sitting at the boring end of that graph which is maximum stake and minimum base reward rate. Which I have always questioned, why build a dynamic reward mechanism and bother explaining it visually if staking is expected to remain full? The obvious answer is that $LINK can be unstaked but Chainlink’s own explanation of v0.2 makes this even more interesting. The long term intention for staking rewards to increasingly come from external sources such as user fees, while emissions rewards can trend toward zero. That then changes how I look at this graph entirely. Today the rough model is: LINK emissions are staking rewards But now, we’re on the verge of a full tokenisation cycle where Chainlink network activity creates the fees that become the rewards for $LINK stakers What happens when staking eventually helps secure far more than the current ETHUSD feed. CCIP. Data Streams. CRE. Suddenly you have two forces working against each other. Demand for Chainlink services will surge Network fees should follow network activity Rewards available to security providers should also follow? Why else design this graph this way and have it on your site? All this while available LINK goes down As LINK required for security goes up Reward required to attract that LINK will have to theoretically follow If insufficient LINK is staked, the reward rate rises. That attracts LINK. If too much LINK is staked relative to the rewards available, yield falls. Capital can move elsewhere. The system potentially finds an equilibrium. Soooooo maybe we aren’t supposed to live permanently on the righthand side of that graph. Because right now we have. Maximum staking participation and minimum yield. The interesting part of the graph is to the left because if Chainlink eventually has substantial fee revenue flowing into staking while liquid $LINK is increasingly demanded elsewhere throughout the ecosystem, the network effectively has to competitively purchase economic security from LINK holders. And the mechanism for doing that already exists!!!!! Variable staking rewards. That’s what makes this fucking disgusting little graph so fascinating to me. It’s not here’s what happens if people unstake. It’s showing you the foundations of a future system where the yield on LINK becomes the market clearing price for securing Chainlink services. Network usage determines the value available. Staking demand determines how widely that value is distributed. The reward rate becomes the balancing mechanism between them. None of this means 20%, 30% or 40% staking yields are coming. It doesn’t mean the staking pool is going to empty. But Chainlink explicitly designed v0.2 to accommodate external reward sources such as user fees. I’ll leave you with this, WHAT DOES THIS MECHANISM LOOK LIKE WHEN CHAINLINK IS GENERATING MEANINGFUL REVENUE AND $LINK FREE FLOAT CONTINUES TO DROP? I suspect that’s when this graph becomes a lot more interesting.