The annual South by Southwest (SXSW) film festival in Austin, Texas is known for featuring the latest and most celebrated in film, music, and technology. At this year’s event, Chainlink co-founder Sergey Nazarov joined Real Vision host Ash Bennington for a virtual fireside chat illuminating how Chainlink’s decentralized oracle infrastructure enables web3 and its Cross-Chain Interoperability Protocol (CCIP) is being engineered as a secure abstraction layer that connects legacy web2 systems to the new world of web3.
Here are seven of the conversation’s key takeaways.
- Web3’s fundamental paradigm shift is about reinventing how people form relationships with each other and with institutions. Smart contracts powered by Chainlink oracles can replace agreements based on institutional promises with agreements that are guaranteed by cryptography.
- Nazarov envisions CCIP as the tipping point that will bring web3 systems to parity with the speed, efficiency, and composability of web2 systems.
- Mainstream adoption of web3 systems is likely to accelerate as more people become sensitive to inflation and more centralized systems (Robinhood, Evergrande) fail to uphold their promises.
- Chainlink approaches cross-chain interoperability as a matter of communication – not just token movement – between chains. Nazarov said CCIP is intended to be a future-proof standard for cross-chain communication analogous to the early internet’s global TCP/IP communication standard.
- CCIP will apply the same Chainlink oracle network that secured over $75 billion in smart contracts at the end of 2021 to a communications standard that is resistant to adverse events like the recent $375 million Wormhole token bridge exploit.
- The goal of CCIP is to allow web3 developers to create cross-chain smart contracts utilizing different blockchains optimized to perform particular tasks. These consumer-friendly cross-chain smart contracts would replicate web2 applications, like Uber, that incorporate numerous different APIs.
- Enterprises will be able to integrate CCIP as an abstraction layer that allows legacy infrastructure to seamlessly interface with different chains through one framework, satisfying what Nazarov believes will be an inevitable increase in users’ demand for DeFi.