Chainlink co-founder Sergey Nazarov rang in the new year with a new video outlining Chainlink’s outlook for 2024. Having securely delivered 11.5+ billion data points onchain and enabled $9.3+ trillion in transaction value, Chainlink has become the web3 industry’s leading decentralized computing platform and the standard for onchain data, computation, and cross-chain connectivity for emerging DeFi platforms and traditional capital markets.
“Our goal is to merge these two worlds,” Nazarov said. He described the fundamental difference between financial assets in DeFi and TradFi as “just nomenclature.”
“They’re all just financial assets that focus on transactions, transactional volume, liquidity, and counterparty risk.”
He said Chainlink’s top priority in 2024 is continuing to facilitate TradFi’s blockchain adoption.
“It’s pretty obvious that vast pieces of the global financial system will move into this blockchain-based state because of various efficiency gains, various security benefits, various counterparty risk reductions, and actually the ability to open up entirely new markets that were previously not in the global financial system,” he explained.
In its 2023 Most Influential list, CoinDesk highlighted Nazarov’s emblematic approach to uniting TradFi and DeFi into a single internet of contracts, noting: “It’s fitting that he can rock both a plaid shirt and a three-piece suit, a symbol of the two worlds coming together.”
One of Chainlink’s biggest 2023 milestones was Swift’s collaboration with over a dozen top financial institutions demonstrating how 11,000+ TradFi entities can transact with public and private blockchains using Chainlink’s Cross-Chain Interoperability Protocol (CCIP) with their existing infrastructure. This accelerated capital markets and enterprise adoption of CCIP to unlock Chainlink-powered tokenized real-world assets (RWAs) such as ANZ’s cross-chain green financial products.
What sets Chainlink apart, in Nazarov’s view, is its ability to reformat traditional assets into RWAs that serve as a golden record. Chainlink accomplishes this task in three parts: providing various Chainlink Data Feeds to RWAs, continuously updating RWAs to reflect the status of offchain assets through Proof of Reserve, and allowing RWAs to move freely between private bank chains and public blockchain applications through CCIP.
“Chainlink is the only platform that can help you generate this golden record, maintain it securely and reliably, and allow it to move and connect it to all the counterparty participants that will buy it,” he said.
All three of these features are vital for global banks, asset managers, and a majority of institutional investors seeking to create, buy, and sell digital assets.
“We’re focused on making a system that can allow all of the banks and asset managers to use the system and therefore get their value into the blockchain world, which means that working with the CSDs (central securities depositories) is actually quite important because they are the ones that traditionally play that role,” Nazarov explained.
Emphasizing the fundamental similarities between TradFi and DeFi, he envisions both industries will ultimately share the same global user base.
“We’ve been working with banks, asset managers, financial market infrastructures, for many many years,” he said. “Now I think it’s accelerating because they’re in the position to accelerate and we are now meeting their demand. I think you’ll see much more of that in the coming year.”
Watch the full video.