Chainlink co-founder Sergey Nazarov recently joined Nathaniel Whittemore on The Breakdown podcast for an in-depth discussion about prevailing web3 topics such as the growing demand for systems powered by cryptographic truth and how blockchain technology could help defend against adversarial AI.
Nazarov also shed light on how far the decentralized finance (DeFi) industry has come and how far it has to go using a familiar analogy.
“I think of it like the early days of the internet,” he said. “In the early days of the internet, you might have had information transfer through email and messages, but you didn’t have e-commerce yet.”
The tipping point that enabled e-commerce to mature into one of the “main use cases for the internet” was the threshold where internet and encryption technologies had evolved to the degree that they could be combined to facilitate secure digital transactions.
“I think DeFi is the early e-commerce,” Nazarov said. “DeFi right now is in the stages of e-commerce where you would send checks through the mail to get your books delivered by the U.S. Postal Service. And that means it has a very, very far way to grow into something really amazing.”
Reflecting on key takeaways, such as the role of tokenization and the importance of network effects, from DeFi’s early days, he anticipated the e-commerce-equivalent stage of DeFi will stem from combining decentralized infrastructure, such as oracle networks and smart contracts, into advanced applications that establish DeFi as a more secure alternative financial system.
“The next generation of applications, the ones that will redefine the blockchain industry from a speculative environment with tokenization into its e-commerce equivalent of the way that all peer-to-peer and even peer-to-platform transactions work, is the next stage,” he said.
Watch Nathaniel Whittemore’s full interview with Sergey Nazarov on The Breakdown podcast.