Chainlink Introduces Onchain Reserve Backed by Offchain and Onchain Revenues
Chainlink has launched the Chainlink Reserve, a new mechanism designed to convert off-chain and on-chain revenue streams into LINK tokens, marking a strategic shift toward long-term sustainability for the decentralized oracle network. The reserve, announced Thursday, will function as an on-chain holding pool built from revenue sources that include enterprise-level service payments and protocol usage. By using a system known as Payment Abstraction, the reserve enables the programmatic conversion of various payment types into LINK, the native token of the Chainlink ecosystem. Revenue Converted to LINK Through Payment Abstraction The Chainlink Reserve will be primarily funded through Payment Abstraction, a tool introduced earlier this year. The system allows Chainlink users—both enterprise and protocol-based—to pay for services using stablecoins, gas tokens, or other preferred currencies. Those payments are then converted into LINK using a combination of Chainlink infrastructure and decentralized exchange mechanisms. In a development disclosed alongside the reserve launch, Chainlink confirmed that Payment Abstraction has now expanded to include offchain payment support. This means the system can now convert revenue from external enterprise sources, even when payments are made outside the blockchain, into LINK tokens. According to the announcement, this includes existing contracts and future integrations. Chainlink said the dual-channel funding approach—capturing both off-chain and on-chain revenue—would allow the reserve to gradually build up LINK holdings without requiring direct token issuance or secondary market purchases. Focus on Network Sustainability and Decentralized Funding The creation of the Chainlink Reserve signals a broader move by the network toward sustainability and reduced reliance on speculative market activity. By redirecting revenue into LINK and holding it in a programmatically managed reserve, Chainlink aims to support the long-term health of its ecosystem. Although the organization did not provide details about the target size of the reserve or its deployment mechanisms, a spokesperson indicated that the model is designed to function as a self-reinforcing economic layer within the Chainlink protocol. The company also emphasized that the reserve does not alter current service delivery or user-facing pricing structures. Instead, it operates as a behind-the-scenes financial infrastructure aimed at bolstering protocol incentives, node operator compensation, and potentially other undisclosed applications.
Smarter Web Launches Bitcoin-Denominated Convertible Bond for $21M
The Smarter Web Company (AQUIS: SWC) announced the launch of a new capital-raising instrument, Smarter Convert, structured as a convertible bond denominated in Bitcoin and fully subscribed by French asset manager TOBAM for $21 million. The initiative, developed in partnership with TOBAM, allows for potential equity conversion while offering downside protection for investors. The bond was priced with a reference share price of £1.95 and a GBP/USD exchange rate of 1.3288. Smarter Convert is intended to give the company strategic access to capital without immediate dilution of shareholder equity. Bond Terms Include Conversion Premium, Downside Buffer Under the terms of the agreement, investors may convert their holdings into equity at a 5% premium to the reference share price. The company retains the option to force conversion if its share price trades 50% above the conversion price for 10 consecutive trading days following a six-month holding period. If bonds are not converted within 12 months, Smarter Web is required to repay 98% of the bond’s value, providing investors with partial downside protection. The bond principal is denominated in Bitcoin, meaning repayments are adjusted according to the digital asset’s value at maturity. However, the conversion share price remains fixed in British pounds. TOBAM, a Paris-based institutional investor known for its early involvement in Bitcoin, subscribed to the bond through three of its managed funds. The firm began its Bitcoin investment activity in 2016. Equity Impact and Future Issuance Possibility Should all bonds be converted, Smarter Web estimates 7.7 million new shares will be issued, representing the equivalent of the $21 million investment at the conversion price. This would result in a 5% lower dilution rate compared to a standard equity raise, according to the company. While this tranche is exclusive to TOBAM, future bonds may be offered under the same structure to other investors, depending on market conditions. The company also stated it would cap the amount of Bitcoin acquired through this mechanism at 30% of its current unencumbered Bitcoin holdings. The move is part of Smarter Web’s broader strategy to expand its Bitcoin-backed balance sheet while maintaining flexibility in capital sourcing. Company and Investor Statements TOBAM CEO Yves Choueifaty said the structure aligns with the firm’s long-term investment philosophy and belief in Bitcoin as a financial asset. Smarter Web CEO Andrew Webley described the launch as part of a strategy to diversify funding channels while managing equity dilution. The company shares closed at £1.95 on August 5.