Stake.link (SDL) Explained: What It Is, How It Works & Why It Matters

If you’ve been following the Chainlink ecosystem, you’ve probably seen the name stake.link pop up in DeFi dashboards. But what exactly is stake.link, and why does its native SDL token matter to a LINK holder? In this guide we break down the protocol, its unique liquid‑staking products, the tech behind it, and how you can start using it today.

What is stake.link and the SDL token?

Stake.link is a dedicated liquid‑staking platform built for the Chainlink ecosystem. Launched in 2023 by a group of 15 top‑tier Chainlink node operators, the protocol lets you lock LINK (and later POL) while receiving a tradable receipt token that auto‑compounds rewards. The receipt token for the platform’s governance and fee‑sharing is called SDL. SDL holders can stake the token to earn a share of platform fees and vote on protocol upgrades.

Why liquid staking matters for Chainlink

Unlike Ethereum, LINK cannot be natively staked on its own chain to secure the network. Node operators need to lock LINK into the Chainlink staking contract, but the tokens become illiquid for the duration of the lock‑up. Stake.link solves this by minting stLINK, a liquid staking token (LST) that represents your staked LINK. Because stLINK is an ERC‑20 on Ethereum, you can use it in any DeFi protocol-swap it on Uniswap, lend it on Aave, or provide it to Curve pools-while still earning the underlying staking rewards.

Stake.link’s core products

• stLINK: Represents LINK that is locked in the Chainlink staking contract. Rewards are auto‑compounded and reflected in the token’s balance.
• stPOL: Launched in Q2 2024, this token works the same way but for POL (Polygon’s native token) staked on the Polygon network.

As of 21 Oct 2025, the protocol holds $64.91 million in Total Value Locked (TVL) on Ethereum, with a combined staked value of $82.06 million when you factor in SDL staking. The average APY across both products hovers around 5.15 %, though it fluctuates with market conditions and the amount of LINK or POL being staked.

SDL: Governance and fee‑sharing

SDL does more than just give you a voting badge. When you stake SDL, you receive a proportional cut of all platform fees-trading fees from the Uniswap pool, performance fees from the auto‑compounding engine, and any future fee streams the protocol adds. This creates a dual‑incentive model: SDL holders benefit from governance power *and* a passive income stream tied to the platform’s overall health.

Technical architecture and user requirements

Stake.link runs on Ethereum smart contracts audited on GitHub. Interaction requires an Ethereum‑compatible wallet such as MetaMask, with enough ETH to cover gas for staking, withdrawing, or swapping. The protocol is deliberately simple-no custom UI libraries, just a clean web portal that connects to your wallet, lets you choose the asset (LINK or POL), and confirms the transaction.

Because the LSTs are standard ERC‑20 tokens, they can be integrated with any DeFi app that accepts ERC‑20s. This composability is the main advantage over “locked‑only” staking solutions.

How stake.link stacks up against the big players

Stake.link’s niche focus gives it deeper integration with Chainlink’s oracle mechanics, but the smaller TVL and lower liquid market depth mean higher price impact when swapping large amounts of SDL. For users looking specifically to keep LINK liquid, however, it remains the only purpose‑built solution.

Risks and considerations

• Liquidity gap: SDL’s pool on Uniswap holds under $0.5 M, so large trades can slide the price.
• Regulatory exposure: The SEC’s 2024 action against Lido highlights that liquid‑staking protocols can be treated as securities.
• Smart‑contract risk: As with any DeFi app, bugs could lead to loss of staked assets. Stake.link’s code is open‑source, but audits are less frequent than Lido’s.
• Market concentration: Most TVL sits on Ethereum, so gas fees can spike during network congestion.

Step‑by‑step: How to start staking with stake.link

1. Install MetaMask (or any Ethereum‑compatible wallet) and fund it with ETH for gas.
2. Buy LINK (or POL) on a spot exchange and transfer it to your wallet.
3. Visit stake.link and connect your wallet.
4. Select the asset you want to stake (stLINK or stPOL) and enter the amount.
5. Confirm the transaction; the protocol will lock your tokens in the Chainlink/Polygon staking contract and mint the corresponding LST.
6. If you also want fee‑sharing, go to the SDL staking section, approve SDL, and stake the desired amount.
7. Now you can use your stLINK or stPOL on Uniswap, Aave, or any compatible DeFi app while earning auto‑compounded rewards.

To withdraw, simply click “Unstake” on the dashboard, pay the gas fee, and you’ll receive your original LINK/POL plus accumulated rewards after the protocol’s unlock period.

Future outlook for stake.link

The addition of stPOL shows that the team is serious about becoming a multi‑chain LST index. Their roadmap hints at bringing in staking for other high‑value assets such as SOL or AVAX, which would broaden the user base and increase SDL’s utility. However, the protocol’s growth is tightly coupled with Chainlink’s market relevance-if Chainlink’s oracle demand wanes, so will the incentive to lock LINK.

Regulatory clarity will also play a role. Should the SEC provide a definitive stance on liquid‑staking tokens, stake.link may need to adapt its fee‑sharing model or add KYC layers. For now, the platform remains a solid option for LINK holders who want liquidity without sacrificing staking rewards.

Key takeaways

• Stake.link is the **only** liquid‑staking solution built specifically for Chainlink’s LINK token.
• Users receive stLINK (or stPOL) which can be used across DeFi while automatically earning staking rewards.
• The native SDL token powers governance and fee sharing.
• Liquidity is modest compared to Lido or Rocket Pool, so large trades can impact price.
• Getting started only requires an Ethereum wallet, some LINK or POL, and a bit of ETH for gas.

Frequently Asked Questions