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Sergey Nazarov On How Trust-Minimization Becomes Society’s New Minimum Standard

At Coindesk’s Consensus 2022 festival in Austin, Texas, Chainlink co-founder Sergey Nazarov virtually joined Lattice Capital’s General Partner Mike Zajko for a Q&A discussion about how Chainlink’s 1000+ bespoke oracle networks pave the way for both web2 and web3 systems to achieve a cryptographically guaranteed world where trust-minimization is the new minimum standard for interacting with institutions, peers, and technology platforms. 

Nazarov said DeFi’s superior yield has been a primary factor driving its growth thus far, but he sees inflation and solvency issues that make the world an “increasingly scarier place” as what ultimately drive DeFi’s mass adoption.

“All of that will lead people to look for an alternative to the traditional financial system and I think that search for an alternative has already gone underway, through the massive rise of inflation, which is now a household topic,” he explained. 

Regardless of what the market looks like, Nazarov believes DeFi’s adoption will only continue to accelerate, noting, “I think we are in the middle of an adoption boom for DeFi.” 

He continued, “We’re only going to see an expansion of both the quality and complexity of DeFi financial products.” He said the Chainlink Network will support this expansion by providing greater varieties of data, such as identity data, for both decentralized web3 applications that are inherently trust-minimized and web2 applications that seek to become more trust-minimized in response to user demand.

“Trust-minimization is what our entire industry is about,” Nazarov said. He described “two paths that end up in the same place,” where web3 systems achieve the robust usability that web2 users expect and web2 systems achieve the trust-minimized guarantees of web3.

“But really the whole world is going to the same place,” he said.

Nazarov believes the blockchain industry supported by Chainlink’s decentralized oracle networks offers “a way out” from a world where users don’t have control over their assets and institutions can renege on their promises.

“There is a way out of that type of world into a world that is cryptographically guaranteed, and whether that world appears from a web2 direction or a web3 direction, I think it all ends up in the same place – where there’s highly usable, highly scalable, ubiquitous cryptographically guaranteed applications that make cryptographically guaranteed relationships with institutions, technology platforms, and peers the new minimum.”

Watch Chainlink on stage at Consensus 2022.

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