Next up at #SmartCon is a keynote speech from @SergeyNazarov, co-founder of @chainlink
#Chainlink $LINK
Cryptographic truth is strictly better than "just trust us"
Smart contracts are larger than many assume
The problem being solved is "what is the truth" and "how does the society work on the notion of trust"
It is a spectrum from paper promises to cryptographic truth
People don't think they have an alterative, but they do, it appeared in 2009 with Bitcoin and has since evolved
Cryptographic truth to guarantee outcomes based on math
Bitcoin, Ethereum, DeFi is based on decentralized infrastructure
Right side of spectrum just appeared
Since the invention of bank notes, we've seen overprinting, defaults, and inflation
All have similar inflation issues, Sergey gives a history lesson in fiat history
Defaults happened in a few years, not decades
Such failures keep happening; e.g. great depression
This is the longer term history of paper based promises, usually the same story
"great idea, let's see how fair it goes, accelerate, push the gas petal, massive amount of paper fiat, on no we over did it, inflation, default, promises no longer being honored, tough luck"
That doesn't need to be the way the world works
In modern times, we haven't learned from history
We keep pushing the gas petal, historically it's always lead to the same place
"just trust us" there's always a boom and bust cycle
We're in the boom cycle....
There will be a problem at some point, inflation has already increased
People has pushed the metal to the floor
Off the gold standard since 1971, we've accelerated by a lot
Leads to debt and insolvency
Every single indicator shows we've pushed the gas petal hard
Over 20% of USD has been printed in the last year
Greek banks denying access to funds in 2015
"just trust us" guarantees don't work, but finally there is an alterative
That is what our industry is about
Modern example is @RobinhoodApp...
"just trust us" has failed us
Robinhood and many other failed consumers
"just trust us" era is coming to an end
Very different way for world to work
In DeFi, there are cryptographic guarantees to execute a certain way, can't get away from that
You're going to get the behavior you expect
Never before in history has this been possible
Now with a private key and blockchain, you control your own funds
Why should we care?
It's not just about finance, gaming, or insurance
It's about the way the world works
This influences everyone, average consumer, institutions, everyone
Cryptographic truth is the alterative, backed by math, encryption and physics
Best guarantee that can be provided from every single product
So different, that people who aren't used to it, can't even process the difference
It's a night and day difference
Every single case he's mentioned this to, institutions, startups, etc, he has yet to hear "I prefer the just trust us process, sounds fun"
Nobody prefers the weak paper promises where you can be screwed
The vision of @chainlink Labs is a world powered by truth
cryptographic truth
Truth is better than paper based trust
This is at the core of our beliefs
Chainlink Labs and Chainlink Network aims to connect everything to truth
That's a world much better to live in for everyone
No small group of people who can take money from everyone
Worthwhile goal
This is achieved, by creating more and more advanced hybrid smart contracts
the more advanced SCs become, the more use cases the technology our industry provides can go
The more SCs can do, the more gaming, insurance, etc is powered by SCs
Seeking to extend SCs
This will expand and grow the pie, the source of cryptographic truth
Transition the world from paper guarantees trust us, to the cryptographic truth model
For every industry, works on multiple models
Trust-minimized off-chain computation and all the world's existing infrascture
Off-chain portion of the world falls into
Off-chain Data
Off-chain Compute
Cross-chain compute
We are already see hybrid smart contracts with DeFi because they have these services
This has already resulted change in our industry, well past what DeFi started as
Many more entities have joined the advantages of smart contracts
Multiple off-chain services by SCs
Building a global standard for cryptographic truth
HTTPS
Linux
Chainlink
Open-source standard, built on better security, innovative first mover, services most smart contracts
Improve society through infrastructure
Over 250+ working at Chainlink Labs and many users
Initially, what we see is various decentralized services enabled distinct industries that could not exist without otherwise
Price Data is the first well-known use case of this
Chainlink powers the largest lending and DeFi protocols
Time-tested, battle-hardened, and continues to secure the ecosystem
Majority of DeFi uses Chainlink oracles
Reliable system of data
$70B market size initially
All of the world's financial products, insurance processes, etc will eventually be in a smart contract
Absolutely no reason why they wouldn't
Many many industries will be powered by Chainlinked smart contracts
Composability for all world's markets
Hyper-reliability for all markets, DeFi is just a signal, the early picture of what is to come
This is inevitable, only question is how quickly this will happen
Speed at which "just trust us" guarantees fail, is going to accelerate this
Talking with many banks, chains, etc
People want reliable guarantees that can be fulfilled
More and more services, means more smart contracts, more useful use cases, more adoption
Proof of Reserve replaces the one year audit process
Enron, Wirecard, buddies with auditors that missed something, conflict of interest
1 year audit versus 1 second audit providing every single thing
On-chain Proof of Reserve is superior
Everyone wants faster better audits
Starts with Fintechs, crypto firms, but the fundamental proof benefits, is 100x better than the existing 1 year audits
Everyone can audit stablecoins on a block by block basis, proven by a data source
Undercollateralized stablecoins will be discovered within 10 seconds
From there, it just expands
Cryptographically valid proofs, you can then build all kinds of systems
Initial step from Chainlink
Favorite example from Sergey, weather insurance
Lack of rain, hurricanes, forest fires, etc
How do manage this risk if you don't have access to insurance, you pray to the rain gods
Important for emerging markets
Smart contract insurance can be accessed anywhere
Even if your local legal system doesn't work, or no insurance providers, predatory lending, now you can side-step that
Automatically get paid through on-chain smart contract Chainlinked insurance
$50 Android phone and internet, can now have better insurance than you
That will change a farmer's life in emerging nations
Underpinning of society not seen by most
Inclusion of data providers is key
@accuweather recently launched a Chainlink node to bring their weather data on-chain to power these smart contracts
smart contract state on blockchains + weather oracles = makes it reality
give smart contract developers what they need
This will change our industry and change the way the world works
Dynamic NFTs using Chainlink oracles to keep it updated, value of NFT can be tied to real world
Verify your identity to on-chain domain systems like @unstoppableweb or @ensdomains
Trust-minimized off-chain compute
Compute done in oracle network, that provides trust-minimized and decentralization
Now moving onto other off-chain computation like Keepers and VRF
Chainlink VRF generates 200k requests per month
Data is key, but so is trust-minimized computation for smart contracts
Chainlink Keepers is now live on Mainnet
Launching for users by everyone, coming to more blockchains
Give a computation to a Keeper network, can't do on-chain for capability reasons, cost-reasons, or privacy reasons
The other reason is just like centralization in data is an issue, so is centralization in compute, needs to be decentralized
Don't need to built infrastructure
Off-load off-chain computation to a decentralized network, which can be verified on-chain
Smart contract dev can automate smart contract calls, like telling contracts the time
1,000+ interactions, need to do all of them, Chainlink Keepers provides reliability for this
Why does this matter?
Secure decentralized systems need to be decentralized and secure end-to-end even during extreme 2,500 gwei gas congestion or server downtime
Centralized servers for a keeper is a central point of failure
Just like how you don't want centralized oracles
Prevent DDoS attacks, ensure reliability with Chainlink Keepers
Eliminate congestion issues, network issues, market issues, exploit issues, it's been proven
Reliable method to compute key functions
Unburdens the SC team from doing this, focus on core business logic, provide end-to-end guarantee of decentralization
An example is @AaveAave liquidations to ensure the protocol is solvent, above water and useable
monitor and liquidate undercollateralized loans
For @synthetix_io, it's about fee distribution of staking rewards
Another example is @PoolTogether_ to starting and ending no-loss lottery games
Keepers committed to ensuring reliability for these applications, a large improvement
Protocols become more decentralized and provide more cryptographic truth
Keepers can off-load computations in the Keeper Network for contracts, this can be done today
A contract deployed on-chain can be split into two equal parts on-chain and off-chain execution
The Keeper Network at almost zero cost, execute a portion of the code on-chain
Fully verifiable, a distinct service for that smart contract
A Keeper Network for each smart contract
Scalability and privacy, can have code broadcast on-chain
Very extensible capability already being done
More robust hybrid smart contracts
Keepers monitoring and then execute results to be delivered on-chain and verified
Check out Keepers
keeper.chain.link
Add more nodes, expand computation, and prove this to your users
Cross-chain compute is the next aspect
The way to make the most advanced smart contracts of the future, cross-chain dApps
String together multiple smart contracts on multiple chains together
Announcing the Cross-Chain Interoperability Protocol (CCIP)
Similar to TCP/IP in that it provides connectivity under one standard
Global open-source standard, blockchains to interoperate with each other
Truly cross-chain smart contracts
Giving devs access to perform different actions on different blockchain networks within a decentralized application
An entire world of innovation, new use cases that were not available before
Hybrid smart contracts reinvent how the world work
Expanded definition of smart contract
Scope of a smart contract has continued to expand through decentralized services
Now with CCIP, you can have different core contracts on different networks all inter-connected
Goal is grow the usefulness of the industry
Larger societal collective consensus of cryptographic truth
$1.5T crypto marketcap to hundreds of trillions
@CelsiusNetwork with $16B in TVL will be using CCIP to capture yield across chains
Merge of CeFi and DeFi
Celsius can use Aave on different environments to capture yield and pump liquidity into DeFi
Banks and Fintechs, and more can interoperate with all of the useful smart contracts across all of the different chains
CCIP standard makes this simple, minimized complexity
With CCIP you can send command and tokens to a CCIP programmable token bridge
Send tokens and instructions on what to do with the tokens to the bridge, the bridge will move the token into the protocols according to the instructions
Bridge accelerates cross-chain tokens
Devs don't need to deeply integrate with chains, but can interact with chains by sending commands to token bridge
Like with Celsius, their users can access all yield from all chain
Provides massive amount of value to protocols on those blockchains
1M+ users on Celsius, Aave has a great lending protocol, with CCIP this can be combined as funds can be deposited to Aave markets on any chain
CCIP and programmable bridges to get to the next stage of creating advanced smart contract applications
data, cross-chain, and bridges
Prove to users with cryptographic truth
CCIP is in a layered stack
OCR 2.0 is the consensus and transparent level
Compute environment is the Chainlink Network
OCR 2.0 expands the topics that nodes can achieve off-chain computation off-chain
OCR 1.0 lowered costs by 90%
OCR 2.0 has a large amount of efficient and generalizes off-chain computation, signature aggregation
OCR is the consensus of this cross-chain solution
OCR 2.0 is it's efficiency gains, allows for more nodes to be added
Enterprises like Swisscom and T-Systems and more running nodes in these network
Highest quality nodes and largest amount of nodes in networks
Other bridges had poor cryptographic technology and single digit nodes (anonymous or unexperienced nodes)
With Chainlink, as the fees are aggregated, it increases the security budget to add hundreds of nodes into a Chainlink network
CCIP is an open-source standard with various stake-holders that need a reliable messaging protocol
It's not just about building a bridge but moving commands across chains, which can be used to build a bridge and more
OCR 2.0 -> CCIP -> Programmable Token Bridge
Cross-chain smart contracts can now send commands to each other, sets a global standard, enables various existing bridges and interfaces to build a better bridge
The messaging layer needs to be secure period, consensus about signatures and high quality nodes
CCIP is a messaging protocol for public and private chains
Sending commands across chains in a hyper-reliable manner
e.g. Mint a token on this chain, or lock it on that chain
Multiple blockchains and many dApps, making the entire ecosystem more secure
Next level is the cross-chain services
The Programmable Bridge Reference Implementation shows how you can build a very advanced bridge
Not just movement of tokens, but also add commands like to deposit into a DeFi application, monitor yield, and return funds if it's too low
Bridge abstracts away complexities
The DeFi applications get more usage
Chains benefit as they get more transactions
Whole ecosystem benefits as people can build more beneficial things
More value to everyone
The Chainlink Programmable Token Bridge is one implementation
Others can build their own bridges on top of the CCIP
Large amount of messages for different bridges, they don't have to build their own messaging protocol, use CCIP and build a bridge
Bootstrap your validator set with Chainlink OCR 2.0 networks
Use CCIP to build even more advanced bridges and cross-chain dApps with their own bridge and messaging conditions
The Anti-Fraud Network generates an oracle network that monitors various forms of risk
Like a decentralized anti-fraud department
Monitors all the activity at all levels in regards to cross-chain, movement of tokens, etc
Anti-Fraud Network is a paralleled network
At the most detailed level possible, monitors the mint/burn, lock/unlock, aggregated signatures, deviations, do they need to be sped up
Reducing risk through a risk mode
Acceptable level of risk is set by users and monitored by the Anti-Fraud Network
Prevents fraud in a decentralized oracle network, that is transparent, becomes more advanced with AI
Useful for all users of the CCIP, even beyond cross-chain
Modeled after proof-of-reserve model
Initial Chainlink Whitepaper 1.0 cross-chain listed the goal
Anyone can be an interface for CCIP and benefit from the advantages it provides
Benefits the whole industry, fundamental goal is provide a more advanced version of what our industry provides
That will make the crypto industry about 100s of trillions
The direction this goes is the entire world's value flowing through a Chainlink abstraction layer
Fintechs, banks, etc they just want to use blockchain
CCIP enables people to send commands to blockchains from a single interface
Good for entire industry
Before you were stuck in integrations, but with a single interface web2.0, fintech, and enterprise can use Chainlink to connect with 100s of chains and use all the applications on all of the chains
Talking with enterprises, this is exactly what they need
Chainlink is the abstraction layer that allows them to reliably and provably interact with any blockchain and the applications on those chains
This extends beyond enterprises to CBDCs, allow CBDCs to interoperate with any chains
If
CCIP will open the floodgates and allow 100s of trillions of dollars into public and private blockchains
If CBDCs are issued on blockchains, then they will need a cross-chain solution to bridge the CBDCs across chains
TRILLIONS OF DOLLARS INTO BITCOIN, DEFI, GAMING, AND BEYOND
If the world moves to a blockchain based model for the global industries, what matters is that the entire world moves to the Cryptographically truth based model
Every single time an enterprise integration a blockchain, more value will flow into those environments
This is a huge win for everyone
Chainlink continues to expand its array of services
Accelerate developers with what they can do with blockchains
Decentralized services for all of these use case that people want to see
Feeds
Proof of Reserve
VRF
Keepers
FSS
CCIP
Much more
As each service goes live, more useful stuff gets built, the market speeds up
More and more and more and more decentralized services
Hybrid smart contracts reinvent how smart contracts work
Percentage in DeFi has grown, but still small
$70B is impressive? Just another 5% of crypto and that doubles
10x growth, 50% of crypto will be in DeFi
The game hasn't even started, pre-game music
Before the beginning, people haven't taken their seats yet
Amount of value that will flow into DeFi and hybrid smart contracts
A rounding error for now
The entire global economy will be powered by smart contracts
Trade finance, gaming, insurance, ad network aren't even on this diagram
All of those will be powered by cryptographic truth
that's where this is going
"just truth us" paper promises mess -> cryptographically guaranteed math based truth
That fundamental difference will result in this transition
Largest transitions of history, that's why he's working on this
Point in history, before cryptographic truth and after
New age of productivity, reliability, and interact with each other in a reliable predictable way
The reason is fundamentally there, see it everyday with users
Nobody wants to go back after they get cryptographic truth
Virtuous cycle by providing all the capabilities that will take the world into a state of cryptographic truth
Increase in the amount of services used, Chainlink Network will run more services
This is a small list
Virtuous cycle, chicken or egg problem solved
Keep generating these services with the community, users, partners, etc
Help build a world powered by truth
Deeply grateful to be working on it and working with others with the same vision
Solve the problem of "just trust us"
chainlinklabs.com/careers
If you see the world moving toward cryptographic truth, come work with Chainlink Labs
Work with everyone in the world
Over 250+ at Chainlink Labs around the world
Growing rapidly and working with many other teams
Deeply grateful with everyone working on various Chainlink Networks and Services, and CCIP
All the people that inform people about Chainlink and the larger crypto communities
Sergey is deeply grateful for the support given by everyone
Thank you @SergeyNazarov
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