The launch of Chainlink’s LINK reserve on Thursday comes on the back of large holders amassing millions in the underlying token.
The reserve will be funded by Chainlink’s on-chain and off-chain revenue streams, according to Thursday’s announcement.
The proceeds from the reserve obtained via large-scale institutional adoption of the Chainlink standard will help improve the growth, security, and sustainability of the project.
The fund has already attracted $1 million worth of LINK.
Chainlink’s move in creating a reserve reflects a broader shift in investor sentiment toward crypto markets.
A growing number of companies have taken a page from Strategy’s playbook by adding crypto tokens to treasuries—particularly after improved regulatory clarity surrounding digital assets.
“These digital asset treasuries allow for reaching institutional and retail investors that may not be comfortable or otherwise able to directly trade or own crypto assets rather than stocks,” Matt O’Connor, Co-founder of Legion, told Decrypt.
Similar to digital asset treasuries, Chainlink said it has no plans to sell the LINK tokens held in reserve.
The reserve’s accumulation effectively removes the tokens from circulation in the medium term, creating a sustained negative supply shock.
On-chain data from Santiment also shows a bullish development with high net-worth investors increasing their LINK holdings.
Wallets holding 100,000 to 1,000,000 LINK increased by 4.2% to 670 in August. The large-scale wallets accumulated 0.67% of the supply in the same period, or approximately $85 million worth of LINK.
Data from CryptoQuant also shows a similar negative supply shock with exchange reserves for LINK dropping from 180 million to 147 million tokens.
A reduction in supply on exchanges usually signals holder confidence, meaning fewer LINK investors will be prone to panic selling.