In a recent blog post, Chainlink co-founder Sergey Nazarov celebrated Chainlink’s 2022 achievements and shared his vision for the network’s growth in 2023. Among several key objectives is the phased launch of Chainlink’s Cross-Chain Interoperability Protocol (CCIP), which will enable Chainlink to function as a fundamental abstraction layer for the increasingly diverse blockchain economy.
CCIP will run on an updated version of Chainlink’s Off-Chain Reporting (OCR) protocol, OCR 2.0. To better understand how OCR 2.0 expands the function of OCR to support multiple new Chainlink products running on multiple new blockchains, Chainlink Labs’ Head of R&D, Lorenz Breidenbach, delivered an informative “look under the hood” of OCR 2.0 during SmartCon 2022.
As its name suggests, OCR is a distributed system of decentralized oracle networks (DONs) that periodically report the price of an asset on-chain after accomplishing much of the work to arrive at consensus off-chain. By minimizing on-chain interactions, OCR allows applications like Aave and Synthetix to reduce transaction fees and improve efficiency.
OCR was originally engineered to power Chainlink Data Feeds for EVM chains and, as such, published billions of data points on-chain while securing tens of billions of dollars in value. Today, however, Chainlink is live on a dozen distinct blockchains including non-EVM chains like Solana. The Chainlink Network itself has simultaneously evolved to include a range of new data feeds and services such as Proof of Reserve, VRF, and Automation, with CCIP on the horizon.
In order to power this new heterogeneous blockchain environment, Breidenbach said the goal of OCR 2.0 is to provide a shared foundation for multiple Chainlink services on various chains. 2.0 accomplishes this goal through a reporting plugin interface that abstracts away the complexity of running different project-specific logic across all oracles in a DON.
This means that the same framework for reporting prices on-chain can be used to power cross-chain messaging. Breidenbach illustrated how the oracles in a DON that reach consensus about a price off-chain before submitting a single on-chain report could also enable a smart contract running on one blockchain to message a smart contract running on a completely different chain.
He explained how the composability of OCR 2.0 supports a significantly larger and more complex web3 ecosystem by easily scaling many different Chainlink products to many different blockchains.
“Now, instead of having to redevelop each product anew for each chain, I instead can have one reporting plugin for one product that I can then have interface with many chains by switching out the blockchain integration. Similarly, if I already have a blockchain integration for some chain and I want to launch a new product on it, I can just develop the reporting plugin for it but I don’t need to develop the whole rest of the logic.”
Watch Lorenz Breidenbach’s full presentation at SmartCon 2022.