Story from

Chainlink 2.0 Architects The Future Of Hybrid Smart Contracts

Nearly four years since the publication of its original whitepaper, which outlined the framework for a decentralized oracle network as a secure and reliable way to bring external data onto blockchain, Chainlink released its second whitepaper, aptly titled Chainlink 2.0: Next Steps in the Evolution of Decentralized Oracle Networks. Building on the vision of its predecessor, the Chainlink 2.0 whitepaper outlines a framework for multiple interoperating Decentralized Oracle Networks (DONs), where each individual DON consists of a collection of nodes that can transfer data bidirectionally and perform trust-minimized off-chain computations. 

Similar to layer-2 technology, DONs anchor to existing blockchains and periodically sync data outputs and state changes computed off-chain while establishing guardrails that enforce correct oracle reports and arbitrate off-chain oracle disputes. This new abstraction layer allows the Chainlink network to move beyond data delivery into the realm of off-chain computation. By performing every smart contract function that a blockchain alone cannot (due to limitations regarding cost, speed, privacy or technology), DONs will enable increased confidentiality, randomness and scalability for hybrid smart contracts.

Hybrid smart contracts have the flexibility to be computed on-chain to the degree necessary as well as off-chain, in order to maintain privacy, reduce costs and increase scalability. As Chainlink Co-Founder Sergey Nazarov recently explained on an episode of the Hidden Forces podcast, hybrid smart contracts “are much more feature-rich and have the trust minimization that they need to have while having all of the features that centralized applications have.” As such, hybrid smart contracts represent a huge milestone in the journey toward large-scale blockchain adoption.

“As Chainlink provides more and more decentralized oracle networks with more and more advanced services, we see a very important shift in how developers build smart contracts towards this hybrid model. And I think it’s really the acceleration of that shift which is what this whitepaper is about,” Sergey Nazarov told ZDNet’s George Anadiotis on an episode of the Orchestrate all the Things podcast. 

“It’s really about how do we go from hundreds of individual decentralized oracle networks to thousands or even millions of decentralized oracle networks that all represent individual services, which can then be composed into advanced hybrid smart contracts by developers that want to provide a more advanced capability to their users.” 

“The Chainlink 2.0 whitepaper is a significant advancement in the design of Decentralized Oracle Networks (DONs) which can enable the creation of hybrid smart contracts that combine the immutability and composability of blockchains with the connectivity, privacy, and scalability of oracles to achieve the best of both worlds,” said Co-Founder of SmartContent and Chainlink Today contributor, @ChainLinkGod

“The paper also outlines Chainlink’s innovative super-linear, explicit staking mechanism in extensive detail, as well as how it exponentially increases the cryptoeconomic security guarantees of DONs. Ultimately, this whitepaper provides a long-term roadmap for Chainlink’s evolution over the coming years.”

The Chainlink 2.0 whitepaper introduces new projects like Chainlink Keepers, which provide decentralized and highly reliable automated maintenance of key smart contract functions like harvesting yield and triggering liquidations, and Chainlink Decentralized Identity, in which privacy-preserving oracle protocols interoperate with existing systems in a backwards-compatible manner to enable new use cases like on-chain credit-based lending. 

Chainlink has already achieved the most expansive network effect in the decentralized oracle market, having secured over $15 billion in on-chain value. This success is only a first glimpse of the multi-year vision put forth by Chainlink 2.0, where DONs will empower hybrid smart contract developers to build scalable and privacy-preserving decentralized applications that will cultivate a faster, more efficient and economically just world

For more information on Chainlink 2.0, read the announcement blog and whitepaper, visit the Whitepaper Research Summary on the Smart Contract Research Forum, and listen to Sergey Nazarov’s conversation with George Anadiotis on the Orchestrate all the Things podcast:

Read more about

Have an idea for a story?

If you’re interested in submitting content to be considered for publication, please carefully review the Chainlink Today Content Submission Guidelines to help you get started. We’re excited to hear from you.

Related Stories