During a recent Chainlink meetup in Singapore, Chainlink co-founder Sergey Nazarov gave a presentation on the societal value of cryptographic truth and how Chainlink’s Cross-Chain Interoperability Protocol (CCIP) facilitates a new tier of secure, feature-rich cross-chain smart contracts that initiate the global financial system’s shift toward an internet of contracts.
“All of our collective work in this industry is part of creating cryptographic truth,” Nazarov said. “Before cryptographic truth, we could only relate to each other in a probabilistic way. Now we have a technical way to deterministically guarantee our relationship about everything.”
The Chainlink Network has been foundational to the growth of decentralized finance (DeFi), having so far enabled more than $8.4 trillion in transaction value by delivering nearly 10 billion data points on-chain. “All of those data points were generated in a cryptographically truth-preserving way,” Nazarov said.
The recent mainnet launch of CCIP solves the blockchain interoperability problem for DeFi applications deployed across multiple chains and traditional financial institutions that want to interact with the blockchain economy.
Nazarov explained how CCIP’s Risk Management Network creates an industry standard for “the most decentralized, secure cross-chain system” capable of powering “truly reliable, advanced applications” that can withstand any number of “exogenous external events that you have no control over.”
Top DeFi protocols including Synthetix and Aave have already integrated CCIP to power cross-chain liquidity and multi-chain governance, while Swift is collaborating with over a dozen top financial institutions to develop how banks use CCIP to transact with a range of public and private blockchains.
In the long term, Nazarov envisions CCIP will permit the convergence of DeFi and TradFi into a superior alternative financial system that runs on cryptographic guarantees.
“If we can accelerate that, two things happen: the first thing that happens is the crypto industry grows and the second thing that happens is that the distinction between the bank industry and the crypto industry disappears and it just becomes the new global financial system,” he said. “And that’ll be very good for society, because that’ll be a global financial system powered by cryptographic truth.”
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Watch Sergey Nazarov’s full presentation.