Chained Text Effect

Step 1.
To Start off make some thick text using the settings shown below.

Step 2.
Apply the Bevel and emboss layer style (Layer > Layer Style > Bevel & Emboss), using these settings. Make a selection using the text (Select > Load Selection), as shown below in a). Contract (Select > Modify > Contract) the selection by 8 pixels and feather (Select> Feather) it by 4 pixels.

Step 3.
Choose the gradient tool (a), and set it to linear gradient (b). Drag the gradient tool from top to bottom within the selection.