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How CCIP Breaks Down Barriers To Achieve Global Cross-Chain Connectivity

This week, Chainlink launched its Cross-Chain Interoperability Protocol (CCIP) on the Ethereum, Optimism, Polygon, and Avalanche blockchains, with early adopters including leading DeFi projects Synthetix and Aave. CCIP’s mainnet launch follows last month’s announcement that Swift is collaborating with over a dozen global banks to transact with a variety of public and private blockchains through CCIP.

On a recent episode of The Breakdown podcast, Chainlink co-founder Sergey Nazarov explained how CCIP would ultimately enable the convergence of TradFi and DeFi into a more secure and efficient global market. He further elaborated on his vision for a global internet of contracts in an interview with Nasdaq TradeTalks’ Jill Malandrino.

“CCIP breaks down the barriers that stop blockchains from interacting with each other on the basis of transmitting information and value,” Nazarov said. “The universe that will have access to a blockchain application launched on any chain will grow now to all chains.”

Whereas DeFi previously existed as a constellation of siloed blockchain ecosystems, CCIP allows individual chains to freely communicate with each other, paving the way for more sophisticated cross-chain smart contracts. With CCIP, developers can launch an application on one chain and connect it to the value on all other chains – including public chains and private bank chains.

Nazarov views CCIP as a “fundamental building block of an internet of contracts” that becomes an increasingly valuable universal standard as the multi-chain economy continues to expand. 

“CCIP will be connected to hundreds and eventually thousands of chains,” he said.

As such, CCIP functions like an enterprise abstraction layer for traditional financial institutions, allowing them to interact with any blockchain by connecting their existing infrastructure to a single interface. 

Nazarov summed up how CCIP solves the problem of being locked into a single blockchain for web3 developers and traditional financial institutions alike, telling Malandrino, “This efficiency, this ease of integration into the internet of smart contracts, will continually accelerate and bring on more and more large companies which are faced with the dilemma of ‘What chain do I choose?’” 

Watch the full interview.

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