At last week’s Messari Mainnet Summit, Chainlink Co-founder Sergey Nazarov joined Real Vision host Ash Bennington for a virtual fireside chat about a multi-chain world powered by Chainlink’s Cross-Chain Interoperability Protocol (CCIP).
As a global standard for decentralized inter-blockchain messaging, data, and token movements, CCIP provides a simple framework for developers to build cross-chain applications. In an official announcement last month, Nazarov said CCIP “unlocks the full potential of the blockchain industry, allowing the combination of previously disconnected smart contracts.”
The first decentralized oracle networks (DONs) were about securely delivering real-world data on-chain. Next, DONs expanded beyond the provision of data to different types of computation, such as random number generation with Chainlink VRF. At Mainnet, Nazarov described cross-chain communication with CCIP as the next step in oracle computation.
“The way oracle networks fit into a cross-chain world is they are the decentralized computing environment that will provide assurances that the cross-chain movement of a command from one smart contract on a chain to another contract on another chain, or the movement of a token from one chain to another chain, is done in a decentralized, trust-minimized way,” he explained.
Nazarov said that oracle networks providing trust-minimized, decentralized off-chain computation as cross-chain commands and messaging must offer the same level of trust-minimization and reliability guarantees provided by other decentralized services, such as Chainlink VRF or Keepers, which automates essential smart contract functions.
“All of these computations are different in what they do, but they all need the same level of trust-minimization. Likewise, as the computation is connected to greater amounts of value, you need to scale the security of that computation,” he said.
Bennington asked how close Chainlink is to facilitating a fully interoperable multi-chain future.
“We’re relatively far along,” Nazarov replied.
Over the weekend, IOHK announced that Cardano will join the growing list of blockchains that have integrated Chainlink as their preferred oracle solution. Nazarov said that as more chains integrate Chainlink oracles, there’s a stronger basis for CCIP to create cross-chain capabilities.
CCIP is attracting users from CeFi platforms such as Celsius that want to “future-proof” themselves through multi-chain DeFi integration, as well as top DeFi protocols that want to leverage each other to create cross-chain smart contracts, which Nazarov called “the real power” of CCIP.
He projected that, similar to other Chainlink services, CCIP will be adopted “initially by DeFi and CeFi, and then fintechs and insurtechs, and then gradually more by enterprises,” in response to user demand.
“I think all of them are going to migrate to blockchain-based systems and the fundamental problem that they’re going to have is interoperability with their existing system, for which you need an abstraction layer that allows them to control various contracts on various chains, which is also what CCIP does through its messaging capabilities,” he said.
Nazarov predicted that central bank digital currencies (CBDCs) will eventually move to blockchain-based infrastructure as well. Even before that, he sees CBDCs accelerating progress toward an interoperable multi-chain world.
“The digitization of value and money allows it to flow more easily into blockchain-based systems, which is fundamentally what our industry should want.”