Last week during EthCC, Chainlink launched its Cross-Chain Interoperability Protocol (CCIP), on the Ethereum, Optimism, Polygon, and Avalanche blockchains, followed by general access on multiple testnets. Top DeFi protocols including Aave and Synthetix are among the first to integrate CCIP to power cross-chain smart contracts.
Synthetix’s Synth Teleporters utilize CCIP to secure a unique burn-and-mint model for transferring liquidity between chains, promoting higher capital efficiency and bypassing the need for liquidity pools. In an official announcement, Synthetix Founder Kain Warwick said, “As one of the first users of Chainlink Data Feeds, we’re thrilled to get first access to CCIP and all the functionality it unlocks for Synthetix.”
Warwick joined Chainlink co-founder Sergey Nazarov on stage at EthCC to talk about the current state of DeFi and why CCIP is needed to connect today’s fractured multi-chain ecosystem into an internet of contracts.
“My view is that we are at a point where things work,” Warwick said. “We have working systems; we need to bring them to people.”
Warwick and Nazarov agreed that bringing DeFi to “feature parity” with centralized systems by building user-friendly on-ramps and interfaces – while maintaining DeFi’s transparency and security advantages – will ultimately be the tipping point toward mainstream adoption.
CCIP takes DeFi a critical step closer to feature parity with traditional finance by allowing projects deployed across multiple chains to manage functions like governance and cross-chain liquidity. In a multi-chain world that’s likely to “get more interesting before it gets simpler,” Warwick said CCIP is indispensable for projects like Synthetix, which previously relied on a bespoke Chainlink cross-chain solution to scale between Ethereum mainnet and the Optimism layer-2 chain.
“That’s been awesome and it’s worked really well,” Warwick said. “But for us to turn up and ask [Chainlink] to build a couple more bespoke solutions was probably unlikely.”
CCIP solves the blockchain interconnectivity problem for all projects on all chains. “We’re really excited to have this and it opens up the possibility of going to many more chains for us,” Warwick said.
“I think fragmentation is only going to go sky high because everyone is going to make an app chain,” Nazarov agreed. “So you need a generalizable, scalable system.”
Nazarov reiterated his belief that CCIP will first enable two distinct internet of contracts – one for public blockchains and another for private bank chains – which will ultimately converge into one superior global financial system. “Eventually those two universes will collide and we want to accelerate all of that,” he said.
Watch the full discussion.