Chainlink ‘Smart Money’ Might Be Pulling LINK Tokens Off Exchanges to Stake Them

The price of LINK is up 28% in the past two weeks.

AccessTimeIconDec 5, 2022 at 10:34 p.m. UTC
Updated Dec 13, 2022 at 4:47 p.m. UTC

Chainlink, the crypto oracle project that specializes in providing data feeds to blockchain protocols, is set to allow early access for qualifying users to stake LINK tokens starting Tuesday.

According to a Chainlink web post, "Staking provides Chainlink ecosystem participants with the opportunity to earn rewards for increasing the security guarantees and user assurances of oracle services by backing them with staked LINK tokens."

Nansen, a blockchain analysis firm, said wallets identified as "smart money" have been taking LINK tokens down from crypto exchanges - possibly an indication that users might be planning to stake them.

The price of LINK is up 28% in the past two weeks, from $5.60 to $7.19 at time of writing.

Early access to Chainlink Staking v0.1 opens on Dec. 6 at 12 p.m. ET, while general access is available Dec. 8.

According to a Chainlink blog post, "Chainlink Staking v0.1 will initally be capped at 25M LINK, with plans to scale up to 75M LINK overtime."

"Smart Money" net flow to exchanges for LINK in the past seven days is down nearly 67,000 tokens (worth $486,000), which means LINK withdrawals exceed deposits, according to Nansen.

Nansen considers a wallet to be "smart money" if it is "historically profitable," meaning it meets at least one of several conditions, including: making at least $100,000 by providing liquidity to decentralized finance (DeFi) protocal, SushiSwap and Uniswap, excluding so-called impermanent losses; having at least more than or equal to five times in realized profits on multiple non-fungible token (NFT) collections that were minted in the last 60 months or having made multiple trades on decentralized exchanges in a single transaction that are profitble.

The number of LINK holdings on the Binance exchange has dropped by 7.1 million tokens over the period. The Cryto.com, Kraken, OKX, Coinbase and Gemini exchanges' combined balance of LINK decreased by roughly 951,000 tokens.

Among all wallets, LINK had a large negative outflow from exchanges of roughly $38.9 million in the past seven days.

Investors sometimes transfer coins out of centralized exchanges when they intend to custody their coins themselves for security and long-term holding.

Additionally, 12,731 fresh LINK wallets have been funded in the last 15 days with $261.3 million of inflows, according to Nansen.

Some 50 addresses collected by on-chain researcher Lookonchain received 14.3 million LINK, worth $107.6 million, over the past 12 days from Binance.

One particular smart money whale (0xC54) sent 7,000 LINK tokens to 65 different wallet addresses for a total of 455,000 LINK, worth $3.4 million, according to Lookonchain.

Lookonchain says 0xC54 "seems to be preparing for staking" because community members who are eligible for early access into Chainlink's v0.1 staking pool will be able to stake a maximum of 7,000 LINK per address.

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Sage D. Young

Sage D. Young was a tech protocol reporter at CoinDesk. He owns a few NFTs, gold and silver, as well as BTC, ETH, LINK, AAVE, ARB, PEOPLE, DOGE, OS, and HTR.