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How Hybrid Smart Contracts Can Change The World By Democratizing Commercial Relationships

On a recent episode of the Green Pill podcast hosted by former Gitcoin founder, Kevin Owocki, Chainlink co-founder Sergey Nazarov discussed a number of blockchain industry hot topics, including the growing consensus that open-source software (OSS) and web3 infrastructure like Chainlink’s decentralized oracle networks should function as public goods.

Nazarov also shared his vision for how blockchains, oracles, and smart contracts can create a world with more economic fairness and transparency.

One of the most compelling use cases for oracle-powered smart contracts is crop insurance, which offers farmers without access to traditional insurance a cryptographically guaranteed means to mitigate risk.

“The initial implementations of crop insurance and decentralized insurance against weather and for crops is something that really shows how the entire world can leapfrog towards a fair and transparent model of commercial relationships,” Nazarov said.

He continued, “Commercial relationships are what enable us to live the lives we live. The ability for people to engage reliably in commercial relationships is at the bedrock of capitalism. It’s at the bedrock of how our society works, and it’s at the bedrock of why we all have so much discretionary time to pursue whatever we want to pursue.” 

Nazarov described the plight of people in developing nations where local governments and legal systems prevent them from obtaining legitimate, affordable insurance coverage. “There are entire parts of the world where one negative event can throw a very large population into poverty because they don’t have a way to mitigate that risk,” he explained.

While he acknowledged this use case might not sound as exciting as DeFi and NFTs to people in the developed world, decentralized crop insurance could represent a step function advancement for people in emerging economies. Looking at history, Nazarov regards “the point at which people can manage risk” as the point from which societies expand and evolve. 

In his view, the step function increase from traditional, centralized insurance to decentralized, smart contract-based insurance is analogous to the shift from books to smart phones. 

“I think what the internet did for information is what oracles and hybrid smart contracts will do for democratizing commercial relationships,” he said. “Once you enable that interaction, then people can pursue their economic goals, which is generally when everything improves for everybody.”

Watch Kevin Owocki’s complete interview with Sergey Nazarov on the Green Pill podcast.

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