Chainlink co-founder wants web3 to provide cryptographic guarantees to the world

Welcome again to Chain Reaction, a podcast that interviews newsmakers in crypto to higher perceive the tech behind the hype and the individuals working to construct a decentralized future.

For this week’s episode, Jacquelyn interviewed Sergey Nazarov, co-founder of Chainlink, a protocol that gives an oracle community to energy sensible contracts.

“Oracle networks are really the thing that puts the word ‘smart’ in smart contracts,” Nazarov mentioned. “Smart contracts in and of themselves don’t know what time it is; they don’t have the ability to access any external system […] other than what’s in a blockchain.”

Before beginning Chainlink, Nazarov co-founded 4 different companies, the most up-to-date of which was SmartContract, which additionally focuses on sensible contracts.

Chainlink is often known as a web3 providers platform that connects individuals, companies and information with the world of web3. And for good purpose: The platform has enabled over $7 trillion in transaction quantity throughout DeFi, gaming, NFTs and different main industries.

When it was launched in 2017, the whole worth locked (TVL) in the entirety of DeFi was “well below $100 million,” Nazarov mentioned. By late 2021, that quantity had grown to virtually $200 billion, although it has since fallen to $47 billion in the present day, in accordance to DeFiLlama information.

“When an oracle network goes live on a certain chain and provides data to it, that chain’s total value locked within advanced applications, like advanced gaming applications or DeFi applications, skyrockets,” Nazarov mentioned. “And ‘skyrockets’ doesn’t mean that it doubles; it means that it [grows] more than 100 times.”

In order for blockchains to create superior purposes, they want superior inputs and outputs, Nazarov mentioned, pointing for instance to how Uber couldn’t exist with out different programs that deal with an enormous portion of the workloads and issues it encounters. “Without those APIs, you can’t build an advanced application,” he added.

Web 2.0 vs. web3

For Nazarov, the Web 2.0 world that most individuals use is “not guaranteed in any meaningful way.”

What does that imply? Well, at any level, an entity like Silicon Valley Bank can “change the rules and then you have a difficult situation,” he defined.

Up till SVB’s collapse, many individuals thought banks had been predetermined, Nazarov mentioned. “They felt that banks would always behave in a predictable, repeating way they understood. But now, I think people realize banks are probabilistic and there’s a chance they might not behave in a way people expect because [of] a large amount of human-based decisions and legal promises that are not really guaranteed.”

So how can the world turn into extra dependable and safe?

Through technological, or cryptographic, guarantees in web3, Nazarov feels. “It’s a parallel system of contracts. The Web 2 world defines events in a digital form […] but at the end of the day, those promises are only backed by the legal system and people’s choice to fulfill those promises.”

In the web3 world that makes use of sensible contracts, there’s no capability for human selection or the authorized system, Nazarov famous. “There is just a technically enforced system of contracts.”

In addition to plenty of matters surrounding sensible contracts, technological guarantees, cross-chain interoperability and Nazarov’s long-term imaginative and prescient for Chainlink, we disccused:

• Unexpected sensible contract use instances
• How conventional corporations can tokenize belongings
• AI and blockchain expertise
• CCIP updates

Chain Reaction comes out each different Thursday, so make certain to subscribe to us on Apple Podcasts, Spotify or your favourite pod platform to sustain with the newest in web3 and crypto.