Chainlink Adds Staking After Cutting Sales Staffers
The DeFi oracle provider is the latest victim of the crypto market downturn, as the team looks to boost token economic incentives
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Mark Chainlink Labs as the latest crypto company instituting layoffs and blaming the bear market — while lining up opportunistic new products.
The firm — which powers oracle solutions and related smart contracts tied into Chainlink’s blockchain ecosystem — laid off a “good chunk” of its sales staffers in recent weeks, according to a source familiar with the matter. A second source confirmed cuts took place, adding that the focus of the downsizing was around Chainlink Labs’ enterprise sales team, which predominantly deals with institutions.
Chainlink Labs’ unspecified number of cuts are the latest indicator of an emerging trend. It’s not new that digital asset-focused companies have been forced by the market to lay off staffers to preserve balance sheets. But such efforts have been increasingly concentrated on sales and marketing seats, including business development and investor relations roles.
The rationale: Potential institutional customers have been dropping like flies as formerly interested parties put their crypto dealings on pause in the wake of FTX’s bankruptcy. It’s hard to justify shelling out for an entire sales team, according to one source, when they “don’t really have anyone to call.”
A spokesperson for Chainlink Labs said the platform is still seeing “massive demand” for its core and emerging products — and largely declined to comment on the recent layoffs. Sources were granted anonymity to discuss sensitive business dealings.
“As we are constantly evaluating our business, we recently opted to shift some headcount investment from sales into product and engineering,” the spokesperson said. The startup is continuing to add to its overall headcount, the representative added. The company did make several key hires earlier this year.
Indeed, Chainlink on Tuesday rolled out a new staking mechanism for holders of its token, LINK. The idea is to stake LINK tokens to power and execute on smart contracts that tie into Chainlink’s oracle solution. In digital assets, oracles strive, in part, to serve as a hub of sorts that connects different blockchains under the aim of guiding interoperability.
Chainlink representatives dubbed the effort as ushering in a “new era of sustainable growth and security” for the protocol. The staking pool helps maintain Chainlink’s data-focused efforts between the dollar and ether, specifically — with staking participants being rewarded for monitoring lapses in the performance of the tool.
The staking pool, which is slated to be in beta testing for an unspecified period, is set to be initially capped at 25 million LINK token, good for 2.5% of the protocol’s circulating supply and about 5% of its total supply.
What exactly spurred the layoffs is not clear, but one source attributed the move to the downturn in broader cryptocurrency markets. And the cuts could have been even steeper. The source said there were internal, high-level conversations in recent weeks about parting ways with the entire institutional sales team.
That didn’t happen, the source said — and it appears a middle ground was found in terms of keeping higher-performing salespeople and parting ways with underperforming ones.
“If you have exposure to all of this, you have to cut somewhere,” the source said. “And, now, it’s always sales…They’re not essential [in a bear market].”
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