Chainlink services underpin the Web3 ecosystem with mission-critical infrastructure that powers, secures, and connects innovative applications across DeFi, insurance, gaming, NFTs, and other key verticals. Chainlink Data Feeds was the first service to launch, underpinning the growth of the DeFi ecosystem and helping to secure tens of billions worth of value.
This post, based on Chainlink Co-Founder Sergey Nazarov’s SmartCon 2022 Keynote, encapsulates how Web3 applications are integrating several Chainlink services for enhanced utility, the key role of Chainlink services in enabling the creation of advanced applications, and how cross-chain communications infrastructure powered by Chainlink is being built to enable a highly interconnected and composable Web3 ecosystem that secures hundreds of trillions worth of value.
Enabling Cross-Chain Composability
“It is not difficult to make a bridge—it is difficult to make a bridge that will actually secure value reliably to the tune of billions of dollars, and that’s what we’re doing.”
The Cross-Chain Interoperability Protocol (CCIP) is being built to provide a universal, open standard for developers to build secure services and applications that can send messages, transfer tokens, and initiate actions across multiple networks. It’s one of the most exciting infrastructure services in Web3 because it’s designed to enable thousands of Web3 applications to seamlessly interact and leverage each other’s unique services. Similar to how composable “money LEGOs” in DeFi enabled apps to build upon financial primitives in order to create even more useful applications, CCIP is being built to enable this for the entire Web3 economy.
CCIP is designed to underpin a myriad of cross-chain services, such as the Chainlink Programmable Token Bridge. Why is Chainlink the best protocol to secure a cross-chain bridge? Building cross-chain services—including a token bridge—extends the existing capabilities of the Chainlink Network and leverages its core strength of unparalleled security.
Fundamentally, cross-chain communication is roughly the same computational problem as delivering data. The real difference is that instead of delivering off-chain data to a blockchain network, cross-chain communication involves delivering tokens and instructions from one blockchain network to another. In both these cases, the oracle network must deliver this information in a reliable, ungameable, fraud-proof manner—and that’s exactly where the Chainlink Network excels.
Chainlink is a world-class oracle network that has an unmatched track record. It deploys cutting-edge technology and has not recorded a single external security breach throughout the life of the protocol. And given the important role that CCIP is being built to play in the Web3 economy and the incredible value it is designed to secure, the security of this service is an absolute priority. The necessary development time is being taken to get the initial implementation of CCIP right.
The infrastructure discussed above will lead to more advanced application architectures that leverage an array of different services. Similar to Web2, much of this innovative infrastructure will be hidden from users in the backend.
Consider Web2 applications; do you know what cloud server Uber runs on? Or what services Netflix uses? Most users don’t know. What matters to them is that they get their ride and can watch their show. That’s where Web3 is going.
In the future, developers will select the best blockchain environment for their use case and then integrate all of the different data and computation services they need to power their application. Being able to choose from and combine a vast number of environments and services enables developers to build more advanced and innovative applications that attract an entirely new wave of users and capital.
Ultimately this architecture is what will help bring hundreds of trillions of dollars to the Web3 economy. Already, we’re beginning to see this model play out with more secure, reliable, and advanced DeFi solutions that help them attract more capital.
Conclusion
“The hundreds of trillions of dollars that will be reformatted into this reliable state will make everything happening now look like the very, very early days of something pretty amazing.”
Web3 is where the world’s going. It’s a world of more advanced, reliable, and secure applications that will capture an even greater amount of the world’s value than what the space has achieved so far. Chainlink’s role in this is to continue to build extensions to the protocol that help make these applications more useful to users and ultimately capture more value.