chainlink is the futureThe Role Of Oracle Networks: An In-Depth Chat With Chainlink Co-Founder Sergey Nazarov

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foreign and welcome to another episode of the future money podcast my goal with this podcast is very simple its to go deep in some of the Big Ideas Trends and developments were seeing in the field of crypto and hopefully Empower you with this information and then let you make your own decision on what their impact can be on the future of money and the future of Finance to do this I invite each week one of the leading figures of the global crypto Community to have a one-on-one conversation amongst crypto aficionados and discuss some of these topics before I introduce my guest today please make sure to click subscribe and give us a rate US if a five star rating if you like the podcast it really helps others discover the show and more people discover about cryptocurrencies and the future of money Im super excited about our guests today Sergey nazarov is a co-founder of chain link and before we talk about chain linking we talk about Sergey one thing people often dont know about Sergey is that as a big fan of tea here we go so you know this is a big area Im sure well come up later on the show today Sergey great to have you with us today on the future of money podcast great yes thank you for having me so second before we we go in the conversation today theres a many things I want to discuss you know this this episode is part of really this deep dive series that we have that we go into some of the leading token projects we have globally and really try to understand them and share some educational content with our audience and again maybe a disclaimer for our listeners today again everything we discuss here is our personal opinion theres no investment advice or nothing thats been giving in the show its really for educational purposes and really I think uh one thing before we kick in surrogate today itll be interesting if you can share with our audience your personal background you know and how chain link and how the idea of chain link came to be sure sure so um I mean I got into working with with blockchains back when the only thing that existed was Bitcoin uh approximately 10 years ago over 10 years ago now um and I got in through the Gaming Community because thats uh one of the groups that was an early part of the Bitcoin Community because that had to do with digital currencies so there were three groups there was The Gaming Community that would mine on gpus I was part of part of that group there were you know people who bought and sold the token Bitcoin the only token that existed then they were mainly involved in the specular aspect of Bitcoin even back then and then there were um you know the crypto plank Cypher Punk sold the people who kind of helped build and originate some of the key ideas around around Bitcoin and so I got into it from from that you know gaming point of view and because I knew a lot about the history of digital currencies generally speaking and um then I just began building some of the first applications in this industry uh whether it was for secure blockchain based messaging or whether it was for things around decentralized exchange or whether it was um some of the first smart contracts that were the hybrid smart contract format that that we now power through oracles and after doing that for many many years the realization that um I and my and our team came to is that you really need oracles as a key piece of infrastructure because oracles um create accessibility and they create capabilities beyond the three initial capabilities of a blockchain which are private key signing creation of a token Ledger and with the help of ethereum and its Advent of a state machine on chain right so you can Define contract State you can sign things and you can create token ledgers and those are you know three very very powerful uh capabilities but um they dont really extend the capability of smart contracts Beyond certain use cases which is part of why the reason part of the reason for why this industry has been so focused on tokenization and and certain you know initial use cases like that all of the smart contracts that we wanted to build the more advanced ones whether they were D5 cut type contracts Insurance type contracts global trade contracts SLA contracts whatever they might have been they all required this Oracle piece of infrastructure and we basically saw a number of people um building various chains to provide the first three properties of a cryptographically guaranteed World namely once again private key signing ledgers and state changes on chain and we kind of decided that focusing on creating consensus and guarantees outside of the chain to enable more use cases to come to life was very underappreciated and very necessary piece of infrastructure and so we began to fully focus on that and thats really what oracles do oracles kind of package everything out in the world in a consensus based format that is secure and reliable enough to control the trillions of dollars that are going to make their way into smart contracts right so in addition to a private key you actually have oracles that inform contracts about everything from what time it is to a market price to the location of goods and if you dont have oracles providing that infrastructure you you really cant build something like defy and we basically saw that a number of years ahead and just decided to build that infrastructure because we ourselves wanted to use it to build all these use cases and now were very happy because theres a lot of other people using it to build you know the the best lending protocols the best derivatives protocols all of all of those use chain link and you know were very proud of that I think you mentioned a good point here Sergey because obviously theres all those data on chain but basically what youre able to do is to connect it with the outside world and the real data that is needed to power a lot of these smart contracts any other uh uses that are being there but can you maybe turn to an audience you know obviously when we talk about chain link we say its a decentralized Oracle Network like you mentioned right thats kind of bridging with whats happening uh you know outside off chain can you give us some practical example of a use case for example to make it more easy to understand for our audience sure sure so theres three main categories of what chain link Oracle networks are are will be doing the first one is data the validated data category basically has a set of decentralized node operators come to consensus so generate validation of um various pieces of data whether those pieces of data are Market data for defy or whether they are Insurance related data like weather all of that data cant just control a contract directly it has to be validated basically if you could connect a smart contract directly well first of all you cant connect it directly to an API thats the first initial problem thats called The Oracle problem but then beyond creating a single Oracle that just provides a very basic connection to an API when you provide a single Oracle you seed all control of the contract to that API and because smart contracts are so deterministic and immutable you then have a similar problem to private key type control where now youve basically created this state machine on chain that can Define contractual conditions but youve seeded control of that state machine to an off-chain system controlled by somebody else and not nearly as secure as the on-chain state that everyone values for its reliability security and uh you know tamper-proof properties so providing a single Oracle doesnt really solve the problem you need to provide an oracle Network which is kind of like saying a blockchain network a blockchain network uses consensus generated by multiple independent nodes to package transactions into blocks and those transactions are about one of those three things that I previously mentioned Oracle networks can generate consensus about anything and everything else so Oracle networks dont generate blocks they inject information that that network has come to consensus about into the blocks of a blockchain and that allows the that block and the contracts in that block to interact with that input in a very valuable way one example is defy That Couldnt exist without Market data and that market data right now anywhere between 60 to 90 percent of it depending on the D5 use case is provided through a chain link Network and the reason its provided through a chain link network is because the consensus and the security guarantees of how that Network arrives at validating that data meets the high standards of a smart contract so that you could have trillions of dollars controlled by the data from an oracle Network thats the first category of what an oracle net Oracle networks in the chain link Universe do the second category is off-chain computation so our Oracle networks in the chain link system have evolved to the point where you actually have computations unrelated to data that are still very important for contracts so the Oracle Network itself becomes a kind of parallel decentralized infrastructure that can sit next to any contract and any chain and provide trust minimized decentralized computations on various topics that the blockchain does not want to or is not able to provide them about so for example maybe theres some scalability problems with the blockchain and you can do parts of the computation in an oracle Network maybe there are privacy concerns and you can do the computations in an oracle network with a select group of node operators or realistically theres just some capabilities that blockchains dont have for example smart contracts dont know what time it is so the concept of time doesnt really exist the concept of what block youre on exists but the block that youre on might not be the opening or the closing of a market so one of the most common use cases for the off chain compute capabilities has been both the provision of time through something called Keepers which is basically a very simple automation task whats often called a Cron job um so cron in terms of time and then the the other one thats very popular now and massively growing in popularity pretty much almost doubling in popularity in a short period now has been our random number generation function vrf which is a requirement for fraud-proof games and this is a computation that doesnt use external data but that is generated generated in a verifiable way which means that the game uh the lottery the the nft generation event the token distribution event whatever set of events that require Randomness to be considered reliable now get computation and then the third category of things that an oracle network does um is cross-chain Communications because the problem of cross-chain communications and the problem of cross chain transfer of value is essentially the same problem as Oracle networks in that you need a non-block chain validator set that can come to consensus about very high value Transmissions of data its not external data its chain to chain data and so that chain to chain data is also valuable and and Oracle chain link Oracle networks secure anywhere between you know 50 to 80 or 90 or sometimes even over 100 billion depending on how you calculate it um on a given day and what what that really means is that it is now the most secure and most widely used computational format for off-chain trust minimized computation which is a very large Universe of computation that includes this validation of data so that various data sets including identity data weather data proof of collateral proof of Reserve data computations starting with Randomness and Automation and moving on to things like Fair sequencing and others and relatively soon cross-chain Communications because that is also just valuable data that needs to move between various environments so Oracle networks are kind of this bespoke highly configurable consensus mechanism that can be made to generate a very specific service and theres over 900 chain link Oracle networks now which means theres 900 distincts over 900 distinct Services um you know I fully expect us to cross a thousand uh also relatively soon and that allows it to be both highly scalable highly focused on providing a specific computation or piece of data or connection between environments or chains and it also allows it to be secure because its so highly focused and it doesnt share dependencies or risks with other systems so you know that at a high level is is I think a good General explanation not think the three points you mentioned sir youre very interested in the data start the validation side the computational one of the Cross gen communication before we just want to deck in if you dont mind that is what you just mentioned right now right on the lets say on the first one data validation side right could you explain just to our audience how it works in practice lets say we have a smart contract and then lets say theres four different inputs that are coming from the off of none of chain work right how would that happen how are you making sure actually the information coming in is actually clean and youre able to validate it that its coming in and actually as you said because a smart contract will execute right the code will be law so how are we making sure the input is correct on the first item you just mentioned on data side sure so that I mean I think one of the first things to understand about chain link is that is it is not a monolithic single chain anywhere there is no single chain link chain that just does everything for everybody and therefore gets highly congested and and grows in size and has you know any kind of you know failure conditions from that um it is actually a large and massively growth you know rapidly growing to massive size collection of different Services different Oracle networks and Oracle networks are basically highly configurable validator sets so you can configure an oracle Network to come to consensus about you know at this point close to almost anything and soon it will be pretty much almost anything other than what blockchains do so we we are not going to be creating blockchains were going to be creating a highly configurable consensus method and validate and highly configurable validator set alongside all blockchains and were were live on over 15 chains you know were targeting going to to many more chains than that this year and then hundreds of chains in the coming year years and the data aggregation is also configurable so the the answer to your question really comes down to what we would consider a definitive truth so we have networks with over 30 nodes with tens of different data providers with over 10 data providers pulling from hundreds of exchanges aggregating against a publicly known methodology that everybody can review and they can review the nodes and they can review every single input from every node and every input um ever that that was aggregated on chain and and what that basically results in is a lot of transparency and oversight and that Network that generates that data can be configured even more so it can go from 30 nodes to 50 nodes and it can go from 10 data providers to 15 or 20. and often that configuration is very important because you dont need the same size um and cost of aggregation and data quality for a network that powers one defy app with a million dollars on it versus a network that powers a hundred D5 apps with a collective 20 or 30 billion dollars on them so Oracle networks really um are configured together with users or by users in in terms of generating the optimal mix of speed um data quality aggregation methodology which differs from Network to network but this is the concept of definitive truth so there are many networks now that have created a definitive truth about how you come to a market price for defy about certain crypto assets and even non-crypto assets and at this point the chain link Network um this past year has experienced about a 10x Improvement in speed and scalability and that has actually resulted in web systems also beginning to use that definitive truth so also beginning to use that data and and they use it for the same reason that well at the same reason but a similar reason to the smart contract users they want to prove to their user base that they have no control over the configuration of the data or the ability to manipulate the data and therefore the trend transparency of how chain link Oracle networks aggregate um is is is very useful its useful to both smart contracts and its useful to web applications and so the the market for all of this increasingly is both um smart contracts but now what we are calling trust minimized applications which is all of the applications in the whole world that want guarantees for their users about their infrastructure being tamper-proof and ungameable by the application creator um but so so the answer to your question of how is the data configured is uh really bespoke to each network but I can basically assure you that its been very heavily configured in certain cases to have tens of data providers pulling from all the top exchanges and it does it so well that when theres a flash crash on one exchange or when somebody tries to manipulate the price of an asset on another exchange that manipulation or that flash crash does not make its way into the aggregation and it leaves the D5 protocols unaffected while certain web systems that rely on a single exchange are affected and so even those systems are now beginning to realize the value of this because of of the key capability to verify and configure Oracle networks to create this highly reliable input and and once again that is just one very very concrete vertically focused category of what a chain link Network can do is aggregate Market data which is valuable and increasingly important but just just one category its very interesting Sergey because basically what youre mentioning ironically or actually by Design the definitive truth that were having in D5 is better than the centralized model than in traditional Finance for example right for the reasons you mentioned uh from that perspective can I just nerd that on one other topic you just mentioned before on the scalability show on the off-chain computation element right of course theres been a lot of debates in the community you know from on bitcoin with the lightning Network even on other topics of layer two solutions right now obviously try to bring the scale to a solve or address the scalability issue were seeing in a way lets say with these Oracle networks do you believe this is probably one of the Alternatives obviously which can really solve some of the scalability challenges that we that were seeing right now in the market so I I dont think Oracle networks are an alternative to layer ones or layer twos I think they are a very important complement so so so what Im really seeing um in terms of how the decentralized stack is developing is that people are continuing to focus and I think that is a great thing focus is very important so what Im seeing is that blockchains are starting to try and focus on key features but then theres a strategy where Layer Two is actually become an extension of those chains to focus on certain key features like scalability and I really believe in that right so I believe that l1s and l2s and all those folks can focus and make certain smart contracts State operations private key signing operations and um you know token Ledger related operations really efficient and thats really important for our industry what what Oracle networks will do is they will provide all the additional computation that layer ones and layer twos dont want to or cant do so so what that means is that if layer ones and layer twos dont provide enough privacy you can configure an oracle network with a validator set whose privacy guarantees youre comfortable with because they might use something like trusted execution environments and thats where you can execute that part of the smart contract so so this is where the concept of a hybrid smart contract is very useful in that I think smart contracts will continue to exist in both of these systems in different percentages right so some smart contracts will exist in blockchains to a very large percentage and some smart contracts will exist partially in Oracle networks and partially in blockchains and layer twos so it really depends what you want to achieve and what a blockchain allows you to achieve so for example if you want to achieve data aggregation youre not going to achieve that in a blockchain youre going to achieve that in Oracle network but we have multiple smart contracts right now that of those over 900 Oracle networks use multiple right so they use multiple different Oracle networks for different pieces of data they use other Oracle networks for automation to tell them what time it is to start and to stop the contract they use the verifiable randomness function to generate Randomness for security or distribution purposes and many of them have already begun you know working with us on using the ccip transition of of data between chains or theyre looking at how to how how how to use that correctly so I would really view um blockchains and smart contracts as the core code of an application and l1s and l2s will be where that core code lives and I would View oracles and Oracle networks as all of the services so all of the apis and all of the additional services that core code often uses so if you look at web applications in an example like uber you have core code that defines the conditions of the core application but then you get data about the location of a user from Google Maps you send a text message to the user from twilio and you send the payment to the driver through stripe the people who made Uber they dont need to build all that because they have all of these Services these apis and that has really allowed an explosion in creation and innovation in the web world and that is the explosion of creation and Innovation that we are driving forward in our work on chain link by basically allowing all those services to be added to the core code actually regardless of chain and even across chains so what what I expect to happen is that there will be core codes spread across multiple chains using some kind of cross chain Communication System itll be using multiple different Oracle networks just like uh multiple different chain link Oracle networks for data for Randomness for Automation and for the cross chain Communications as well and that will result in um a much more advanced set of hybrid smart contracts and thats the sense in which it is a hybrid smart contract in that it is not just a fully on chain contract it is an on-chain and off-chain combination but the off chain combination is the Oracle Network which is trust minimized and and thats really the The Innovation that were involved in this podcast is brought to you by bullish bullish is a powerful new exchange for digital assets that offers deep liquidity automated Market making and state-of-the-art security follow bullish on Twitter or visit to learn more please note that digital assets and cryptocurrencies are high risk products consult your professional advisor before dealing in them bullishs services are available in select locations only and not to us persons visit for important information and risk warnings and I think its absolutely very its a very enlightening what youre saying because as obviously we we you know this whole ecosystem of web 3 and also where were heading becomes mainstream these oracles will be basically essential right for everything to operate as we want it and I think the the hybrid smart contract maybe the smart contract Norm as we as smart controvers become become part of our day-to-day life right but certainly I want to ask you Ill ask you on this particular topic you mentioned you know a couple minutes ago that theres over 900 Oracle networks as 10x speed increase at chain link Network experience from all obviously theres a lot of potential we just mentioned right this and theres obviously different verticals with this is being used right now what is the one you think is the most promising from everyone you look at kind of the the future roadmap of chain link with some of these Oracle networks that can be used right so the majority of activity right now is in D5 wepower anywhere from 60 to 90 of D5 depending on the vertical um whether thats lending or D5 derivatives or already a number of other more advanced use cases we you know effectively invented this Oracle Network consensus method together with you know really smart people like our chief scientist Ari Jules who used to be the chief scientist of RSA and the initial implementation of this consensus method was Data aggregation for D5 and that was and is very successful and that is where the majority of those networks are now being used the other categories so promising is a very kind of general term right promising in the near term promising in the long term I I think in the near term D5 is extremely promising because its still at a very low percentage of value relative to the amount of value that could be in D5 so if theres anywhere between 100 to 250 billion in defy and theres anywhere from one and a half to two and a half trillion in the crypto format then its extremely early I mean were talking about you know single digit percentages of of of market share of value that could be in defy and you know D5 has all these Superior properties in terms of yield transparency user control which I think will become increasingly more valued over time especially in a world that becomes more unstable in the traditional sense so I think its its defy um outside of defy I think insurance is a very slow moving but very important industry for facilitating for how the world Works gaming is a big industry thats starting to pick up steam um I think those are those are the top three ad networks are also very interesting because theres huge threat fraud problems there that you know determine a lot of how how things actually work but but really um other than those I think its a little bit unpredictable and thats the really fascinating thing for me is actually where will smart contracts begin to change the world next because theres actually so many places that could be in carbon Credit Systems and incentivizing the the proper use and distribution and effectiveness of carbon credits it it its really a massive number of use cases because when you think about all the trust issues and all the structural problems of how todays systems work if youre presented with the choice of getting a reliable system or the same exact system in an unreliable format you never choose to unreliable format and what web3 and what smart contracts are are there just all the World Systems in a reliable format so you know the the promise here is is kind of hard to predict and and even sometimes hard to grasp in the in the total size which which I do personally strongly believe is in the hundreds of trillions of dollars in value secured so you so on that on that point where the 200 billion that we have in TV out today is literally literally nothing and all that question on that point Sergey I mean what is the rule you see chain link will play as obviously the whole C5 world and D5 will start to merge I mean you mentioned earlier how obviously the oracles are like enabling actually kind of this this interaction to take place right where the smart contract can execute based on external data from The Real World or offline world thats coming in what is the role like from a vision perspective of that chain link is going to play as we see C5 and D5 merged together or come together sure sure so I think the concept that I found very helpful here is what we call a trust minimized application um so a trust minimized application provides cryptographic guarantees for its users the confusion sometimes comes from the variety of cryptographic guarantees that can be provided because some users value transparency some users value private key control of an asset some users value composability with other systems and so when you see some things on a blockchain its sometimes mean or or when when you say its cryptographically enabled or guaranteed or a smart contract enabled system or whatever the new terminology will be it is uh sometimes meaning different things to different groups so I think the right way to think about it is that trust minimization of more and more applications is important and on one end of the spectrum you have Smart contracts and the more advanced version of those is hybrid smart contracts which need to be fully trust minimized and thats where you have a very sensitive user base that asks things like how does the multi-sig work has your smart contract code been audited what does the Oracle Network you use um you know and they really dig in on this and they and they are really really very thoughtful and its impressive to see people digging in and thinking about these questions and that is a growing group of hypersensitive trust minimized application users but then as you go down the spectrum of trust minimization you you arrive at people who might not ask how the multi-sig works or they might not ask how uh whether the contract has been audited but they have specific demands about maybe things like how uh something is settled so we already have tens of billions of dollars in value secured by chain link networks in web 2 systems that use the chain link networks data feeds and data aggregation to prove to their users that they cannot manipulate the settlement of transactions in their centralized web 2 systems and they are progressively making that web2 system more decentralized which is very impressive and I think the real um picture of whats to come so what I think is going to happen is that um trust minimization for users on those various properties of whether its transparency whether its user control whether its tamper proof and its from the application creator whether its composability with other systems will become increasingly important and um chainlink will provide that capability so chain link right now provides a path for web systems to become increasingly trust minimized without throwing out their entire existing infrastructure which realistically the speed at which trust minimization will have to happen for these web systems they will not throw out their infrastructure what they will do is they will add cryptographic guarantees around that infrastructure using blockchains and oracles and then they will present a kind of trust minimization compromise to users and that compromise will be sufficient for some users and will be insufficient for certain power users but that is the next interim stage of you know early mainstream adoption that I already see happening and so the merge of C5 and D5 um I mean I think everythings going to become more defy and thats what I mean by trust minimization but I dont think it needs to be like overnight click the Switch youre completely on a smart contract I think its a gradual transition thats facilitated by Oracle networks as an abstraction layer for these additional trust minimization guarantees that users are already starting to ask for and will ask to for more and for more and more so thats what I think will really drive this is that users will eventually really demand trust minimization and at that point itll it wont really be a choice for applications whether theyre web 2 or web3 trust minimization will be a requirement set by users almost got out of town but I want to focus on this I think its super interesting what you mentioned on the trust minimization right because I maybe its ironic but basically this is enabling some of these web 2 or traditional players now to become and provide some kind of Trust minimization on that level but what do you think will happen obviously theres we talk about encrypt often these intermediaries are going to disappear right the whole idea is pretty great transactions but here what do you think will happen to this businesses institutions that provide trust in the current world whether a financial institutions whether theyre the big four accounting forms and the likes right even data providers right like what as do you think they will see a wave of they will be able to benefit from this web tree uh its a attributes and improve and actually be able to cater to a bigger crowd or you think some of them will completely disappear from that perspective sure so I I feel that the web um web one did a lot of amazing things for for going from zero to one which you know which should all be very grateful for and I kind of grew up experiencing that web 2 I think created an entirely new set of user and consumer interactions and it created those user and consumer interactions through creating interfaces and Computing devices and basically user focused systems that allowed people to interface on various topics whether it was the purchasing of a book whether it was the e-signature of a multi-billion dollar contract whether it was a global trade or derivative settlement for billions or trillions of dollars all of um all of those interactions went from being on a phone or on a piece of paper to being on a interface to being on a web interface and that has made the world massively efficient even now you and me are having this conversation and creating content on a web interface and that is created a massive amount of efficiency now efficiency generally forces groups to make decisions about how they want to relate to it economically speaking and that is what I think web2 did so web 2 forced various groups that created that efficiency that provided books that provided interfaces for um you know people to record things or for people to to to create content like you and me might have needed to go to a studio or something before and record the content and then distribute it through a distributor or something um all of those people who who create that interaction once efficiency comes they need to decide whether they want to participate in the efficiency whether they want to ignore the efficiency um or whether they want to be removed by the efficiency thats it so I think that there are many many banks there are many many various entities that transitioned to embracing web interactions they embraced their clients need to use web systems and computers and the internet and web pages to interface with their assets with their relationships with um with their information with whatever and those entities did well those entities continued and those entities um kind of ended up actually adding more market share because the entities that did not do that found themselves in a place where they could not service their users demands which is fundamentally what capitalism is all about it is about giving people what they want so what I think will happen with web3 is that it wont be the reimagination of the interface to users itll be the reimagination of the guarantees behind the interfaces so there are many many systems that depend very heavily on guaranteeing a certain interaction between parties many many platforms do this whether its for um you know renting a home doing something with a derivative doing something with a trade doing doing really getting paid for generating content whatever it is um generally speaking there is um a huge amount of structural fundamental and largely unsolvable without web 3 trust and contractual and basically just systemic risk issues that most people dont know about because the interfaces and the brands representing the interfaces abstract away that risk and that complexity and thats really what banks and insurance companies and web 2 platforms are is they are a packaging of complexity in a simple digestible form but that complexity and that risk continues to exist so for example Robinhood can package an interface very well but they can still haul trading and that doesnt work for some people so so what this will really be is a reimagination of not the interface but the guarantees behind the interface and its its its that guarantee behind the interface that oracles and blockchains and these systems really generate in a way that was never historically possible and its also I think why sometimes its hard for people to see the value because these systems deal with very back-end problems so generating cryptographic guarantees and cryptographic Truth on a topic that people think they already have guarantees about can be confusing for them but I I think the reality is that many people do not have the guarantees they think they have about everything from their banking relationship to their insurance company relationship to the ticket that they buy to go to to an event that ends up being fraudulent and that is you know a massive surprise because the brand creates all of these assurances and logos and holographic strips and all this stuff but at the end of the day people still have their trading halted they still have derivatives failures with things like archigos you still have things like ever Grande you still have things like Robin Hood happening once in a while and that is what this whole uh thing is about and to answer your question the people that facilitate that efficiency will need to decide if they want to be part of facilitating this new type of efficiency and so that is the decision that they need to make because youre right forgiveness and Melania my producer is going to kill me because were going out of time but actually what youre mentioning here is actually very point because right now theres a lot of things we expect you know if I go on a website I expect to be encryption and secure in the back or you mentioned ever Grande and some of the hedge fund in the family office in New York right I mean we expect these things are there right we expect this big for auditing we expect these security firms are there so the people doing this either youre going to improve and theyre going to bring on this new technology and provide this level of basically a trust minimization to users or basically these guys will be completely gone but I think what youre saying I think also the users expectations will increase because its gonna its gonna be there um one thing I wanna I wanna talk before really uh maybe last question before we move on to the firearm question is the uh at the start of the conversation and by the way this is super exciting obviously talk about you know were going to talk about Oracle networks about data evaluation they officer competition and the cross-train communication I know that the chain link one of the things you guys are working on is this cross chain interoperability protocol a ccip I think you guys calling it can you tell us more and what do you think this is important and how the cross chain uh not only interoperability but the the the dynamic will take place over the coming months and years and what is the role of ccip here so right now you have a large number of different chains that are trying to specialize in different properties and I think that theres a massive amount of really impressive work going on um being kicked off by ethereum you know which they deserve a huge amount of credit for but but theres now a lot of different environments with a lot of different groups building applications um even certain individual app developers building applications the same application on multiple chains and what that really looks like is just what you had with the internet when you had multiple different internets and internets using different standards to facilitate you know what was their version of information and transactions and what you really need is a single unified Communications protocol that can sit between all of these environments and basically allow applications to communicate with each other not just about moving values such as tokens but even about very basic Communications about state about triggering each other and what ccip aims to do is create an open source global standard for all of that communication to happen in a highly secure decentralized open source way that is built together with the top defy um you know and other gaming Define all the really applications that need this and its something that I think will be necessary because of the vast uh you know variety of chains that are are appearing and continue to appear and we hope itll become something close and similar to TCP that becomes a fundamental infrastructure and and standard for how systems in this industry work and so our our goal with this is once again just to level up what developers can do because it is really that additional infrastructure and is really that leveling up of what developers can do that I think will bring our industry into an entirely new um stage of creating value Beyond uh two trillion in cryptocurrency formatted um you know primarily held in exchanges and tokens so I I think ccips goal is really the creation of this global standard for not just Communications but really messaging and and the transmission of data and it will once again also be using the chain link networks and their security guarantees that um already secure anywhere between you know 50 to by some calculations over 100 billion um and that security will also be a critical critical aspect of creating the right Communications and messaging system because its once again high value highly important data thats being transmitted just like the the data that the Oracle networks transmit now its just transmitting it between different places not off-chain apis but rather cross-chain blockchain environments so ccip is really just you know seeking to be this global standard and 30 seconds before we we shut this down like obviously you mentioned its gonna be like we want to be about the new TCP but you know when it comes to crypto what do you think will be the impact on these bridges that were seeing its been on the news recently law with a wormhole what we saw with Solana what we saw with Ronin Network and and the bridge as well what the heck that happened uh a couple couple weeks ago do you think this will create more bridges itll make it easier create more standards or what do you think the impact will be we were a very open group that wants to help make the whole industry successful and as many other people in our industry as we can successful really were building low level infrastructure that a lot of these Bridges could end up using so Im Im completely comfortable with a large number of bridge interfaces bridging protocols and systems using ccip as as the low level standard that runs on chain link Oracle networks for their security guarantees um that is uh that is completely fine I think theres a lot of demand and desire for people to build Bridges and we really just want to give people an ability to build secure Bridge is and that security has to come from a very low level so we are really providing that at some of the lowest level possible and then from there theres an entire stack of interfaces and and other systems that can be built on top of ccip which were very glad to collaborate with people that enable people um to do that as long as they use ccip correctly and as long as they use the the security of the chain link networks themselves as you know as theyre configured to be used in a correct and secure manner then were were absolutely thrilled for um for various groups to use ccip but in the correct and secure way because as you can tell this is a very difficult problem that requires serious secure systems design and PhD and uh you know real academic rigor what are you guys planning planning on launching this by the way Sergey were were working on it now we we dont like to to give out launch timelines until were you know very sure of of the security and the verification of it and then things move pretty quickly were were very careful about setting expectations I I can I can clearly say that were working on it with some of the best people in the entire cryptography industry including people like Dan Bonnet whos the head of the Stanford uh cryptography department and many other people um you know of a similar caliber and were taking it extremely seriously and every additional hack of multi hundred million dollar Bridge losses only convinces us that we need to continue to invest extremely heavily in the low level security of the protocol that will really make it the defining characteristic of why this is the way to move hundreds of millions billions eventually trillions of dollars in value because it does provide that low level security rather than rushing something out and hoping for the best um I think rushing something out and hoping for the best has resulted in in these Bridge issues a very good point I think I think thats very uh respectful from that perspective as well uh Sergey so again were going to finish up this quick fire round of questions Im going to ask you quick quick questions I need one or two Word answers and well keep the momentum going like that and I have I normally I have a bell with me but I dont have a Whitby in my tables is moving so well go quickly with them and Ill go Ill go through these questions are you ready lets go lets rock and roll Sergey if youre not in crypto what other industry would you want to be in if youre not in crypto uh brain computer interfaces are very interesting um I think that has a very bright future thats very awesome I love it what is exciting you the most when you talk to when you think about the future of crypto I think its the ability to make a cryptographically guaranteed world where everybody with an internet connection has a single system of contracts that has nothing to do with their local legal system and has everything to do with our industrys ability to create cryptographically guaranteed systems that puts everyone on a Level Playing Field globally regardless of whats going on in their local geography or whatever some local politician or or person wants or doesnt want to do we should all just have a global system of contracts thats cryptographically guaranteed to us regardless of our size as a counterparty regardless of our geographic location and based on cryptographic truth as a determinant of whether people do business with us and how they do business with us and that I think will unlock you know an entirely new age of collaboration globalization and various other extreme benefits for all both the developed and Emerging Markets I love it actually on that point if there was if the if would it say when what course what is the one course you recommend any student takes today in University um I think analytical philosophy is a very useful course logic in philosophy is a very useful course I I think generally getting to Clarity in your life about how you want to live your life through through philosophy is an extremely useful thing because there is a massive amount of information about you know how to do X or how to do why but you you sometimes I I find its very useful to find the conviction about why you should do X or Y and so my advice to to everybody especially if theyre in University regardless you know if theyre doing engineering or physics or math is unless you know exactly what you want to do with your life and you have a fully written out thesis about why you want to do that with your life getting Clarity from analytical philosophy and uh you know courses on logic and philosophy is uh is something thats been immensely helpful to me so I would I would actually go back and just continue that thats the study of of that thats amazing you know Ive asked this question to hundreds of CEOs and Founders and its the first time I hear that its absolutely correct its its I love it actually on that point just to follow up on that your your nephew comes and sees you and tells you has he just Graduate University has a couple of job offers one is one is from a large web to you know web 2 technology firm one is from a financial institution one is from Academia and one is from the startup what job you think you should take um I think the that he should ask two questions he should ask uh where will I learn more and then he should look to the for the person that hes going to be working with and you should ask himself do I want to be this person in five years and if the answer is yes then he should go work with that person because you you kind of become more and more like the people you spend time with and uh what you learn in the beginning of your career is I think the most important thing um so I would I would give him those two pieces of advice beautiful very wise words and to finish it off yeah classic question if you could have lunch or dinner with one person Dead or Alive lunch or dinner with one person Dead or Alive who would you have lunch with Socrates not surprised with the philosophical answer you gave before so again this was an absolute pleasure I have to say I totally enjoyed every minute of it uh Amelia my producer is going to kill me because we went completely over time but super interesting from that perspective and so again where can people find more about chain link and learn more about uh the protocols and what you guys are building if theyre interested in actually one thing Socrates and Aristotle at the same time can I be invited to that dinner Id love to be there um but um yeah so we we do a lot of stuff on Twitter um chain link just like its spelled on Twitter you know we have a lot of events we have a lot of in-person events that are starting to happen all over the world where people come and talk about you know what to build on blockchains and how we can make this cryptographically guaranteed world together um I would say that yeah the the those events and uh our Twitter are probably the best two places to to to to really see whats going on thats fantastic well Sega thank you very much that was Sergey Nazar of the co-founder of chain link again if you enjoyed the show make sure to click subscribe and give us a five-star rating really will help other people discover the show as well if you want to stay on top of the latest developments in the world of crypto and the future of money again make sure to follow us on LinkedIn on Twitter I have my weekly crypto capsule show that summarizes the crypto developments you need to know about 60 seconds uh My Weekly Newsletter now theyre coming up twice a month quite twice a week now called the future of money and especially for those of you looking to learn more yeah friends who want to learn about crypto uh make sure to check out some of the online courses that I have my latest course on udemy which is now the highest ranked uh uh course crypto course uh onudemy really summarizes in 90 minutes its called introduction to bitcoin and crypto assets all the developments you need to know when it comes to bitcoin ethereum stable coins D5 web 3 cbdcs metaverse and the likes so hopefully guys this was a useful episode hopefully you enjoyed as much I enjoyed uh this discussion with Sergey Sergey thank you very much for being with us and joining me today on this episode of the future money podcast thank you for being with us today sorry okay my pleasure to meet you and thanks for everybody at home Ill see you guys all next time thank you very much Henri Arslanian and Sergey Nazarov, Co-Founder of Chainlink, share an in-depth discussion on decentralized oracle networks and the access they provide to off-chain computations for smart contract applications. Henri and Sergey touch on everything from data communication and validation to the future role of Chainlink in the merging of CeFi and Defi. The pair also explore the issues of scalability in the market and whether oracle networks can play a part in solving the challenges. This episode is ideal for anyone out there interested in broadening their understanding of how oracle networks operate, the beneficial role they play in smart contracts, and how trust minimization is shifting in the industry.___________ Powered by Bullish Bullish is a powerful new digital asset exchange built for institutions that offers deep liquidity, automated market making, and state-of-the-art security. Combining the innovations of DeFi with the regulated environment of traditional finance, Bullish empowers users to trade with certainty at scale across variable market conditions, in an environment backed by multibillion-dollar liquidity contributions from the Bullish Treasury. Follow @Bullish on Twitter or visit to learn more. Not investment advice. Digital assets and cryptocurrencies are high risk products. Consult your professional advisor before dealing in them. Bullish’s services are available in select locations only and not to U.S persons. Visit for important information and risk warnings ___________ Timecodes 0:57 - Introduction and background of Sergey Nazarov, Co-Founder of Chainlink. 5:53 - Henri asks Sergey to share some use cases of Chainlink and to further explain the decentralized oracle network, specifically to understand on-chain and off-chain data communication. 13:24 - Henri asks Sergey to dive deeper into data validation in regards to smart contracts. How does the oracle network ensure that the information coming in is actually clean? And how does the smart contract know the input is correct on the first item? 19:18 - Henri asks Sergey to share his thoughts on the challenges of scalability on the off-chain computation and whether oracle networks are a sufficient alternative to layer two solutions in the current market. 25:01 - Henri and Sergey question if oracles will eventually be essential to how smart contracts operate as the Web3 ecosystem becomes more mainstream. The pair then pivots to discuss the potential of Chainlink and its future roadmap. 28:23 - Henri and Sergey discuss the role that Chainlink will play when CeFi and DeFi merge together. 32:59 - Henri and Sergey focus on trust minimization that current Web2 or traditional players in the space need to provide. Looking closer at the idea behind peer-to-peer transactions, the pair questions if institutions and businesses will benefit from Web3 to allow them to cater to bigger crowds. 40:12 - Henri asks Sergey to share his thoughts on the importance of the Chainlink cross-chain interoperability protocol, CCIP, and how it will evolve in the upcoming years. 43:43 - Henri asks Sergey to further share some details about the impact of bridges, which could potentially make it easier to create more standards in the industry. 46:35 - Henri and his bell hit Sergey with a rapid-fire round of questions, with Sergey sharing everything from what he finds the most exciting about the future of crypto to which university course he recommends students to take, and who he would have dinner with if he could choose anyone. Technology Web Ecosystem Markets Blockchain Crypto Cryptocurrency Podcast Success Strategy OracleNetwork DeFi Web3 Cryptocurrency,Web3,Ecosystem,