Building on previous media appearances during which he presented Chainlink’s Proof of Reserve (PoR) as a new minimum standard that brings essential transparency to the blockchain industry, Chainlink co-founder Sergey Nazarov appeared on CNBC once again this week to elaborate on what he believes is PoR’s essential role in realizing the crypto industry’s core advantage over traditional finance.
Nazarov framed the fallout surrounding FTX’s collapse as a blessing rather than a curse. In his view, the larger traditional finance’s failures, the more fertile ground blockchain technology has to bring DeFi to fruition.
“If the global financial system hits really a kind of rock bottom level,” he explained, “then the thesis of crypto as an alternative financial system will come to the forefront.”
Nazarov reiterated his point that the fall of FTX stems from the same lack of transparency that has plagued traditional finance throughout history. He said blockchain technology is not the problem, but the solution.
“I think there’s also a confusion where the misuse of blockchain technology, such as in the case of FTX, gives people a sense that the technology isn’t ready. The technology in many ways is ten times to a hundred times better than what you have in the traditional financial system, which is why the traditional financial system is quickly adopting it.”
Nazarov indicated a growing number of traditional financial institutions and decentralized exchanges that are working to adopt PoR in order to satisfy mounting user demand for cryptographic proof about the size and composition of their balance sheets. He offered an optimistic outlook on PoR’s solution to an age-old issue:
“So what will happen from FTX is that everyone will adopt Proof of Reserve, and then when people look into the blockchain industry, they’ll see a more transparent, more hardened alternative financial system. And so these types of small hiccups basically create the soil, the environment in which improvements are made.”