gold chainlinkThe Future of Chainlink Sergey Nazarov

chainlink davos chainlink link reddit gold chainlink The Future of Chainlink Sergey Nazarov

hi everybody in order to understand the unique uh value of the web 3 smart contracts and blockchain industry i think its important for us to really deeply look at exactly what it is that this infrastructure and this industry does 10 or 100 times better than anything else currently in existence i view this on two key dimensions the first dimension is the distinction between a cryptographic guarantee and the paper guarantee paper guarantees are what weve all become used to in our interaction with existing systems even if those existing systems are web 2.0 internet systems they still provide what i call paper guarantees a paper guarantee is when you have a legal document that guarantees you certain contractual outcomes whether that legal document is from a bank an insurance company a peer-to-peer a peer-to-peer web platform or any number of other systems at the end of the day you have a piece of paper that is only backed by the probabilistic guarantees of a legal system enforcing or maybe not enforcing what that piece of paper says and this is the way the world has worked for thousands of years up until the emergence of bitcoin and decentralized infrastructure with the emergence of bitcoin and decentralized infrastructure for the first time in history you could be provided something called a cryptographic guarantee as far as agreement was concerned with bitcoin being the first example of you owning a bitcoin being the cryptographic guarantee that bitcoin provided and then there being a consistent expansion of what cryptographic guarantees can provide into additional tokens and state changes through ethereum now on to nfts and d5 and decentralized insurance so the first spectrum is the paper guaranteed to cryptographic guarantee spectrum where on one end of the spectrum you have a legally guaranteed agreement which means that depending on your legal system depending on what you know courts or arbitrators or auditors or any number of other people-driven enterprises decide and those decisions are probabilistic because they could be decided in one direction or another or there could be no decision at all because maybe the counterparty is too large or too influential in certain geographies so paper guarantees have all this risk and probabilistic nature to them and cryptographic guarantees which rely on encryption and private keys have a deterministic level of guarantees so its a hundred percent guaranteed that if you correctly sign something with your bitcoin private key you will be able to move that bitcoin its a hundred percent guaranteed that a smart contract thats written a certain way will execute that way every single time and this difference between probabilistic guarantees and deterministic guarantees is really the more detailed way to look at a paper versus a cryptographic guarantee so thats the first spectrum the second spectrum is the difference between definitive truth and not have any having any shared truth whatsoever not having any shared truth is in many cases exemplified by fake news or scams and definitive truth is exemplified by people pre-agreeing on a set of conditions under which they will resolve their agreement examples of of things on this spectrum are the differences between news thats considered fake news where nobody can agree with the truth is or derivatives agreements that are very very detailed in what needs to happen for that derivative to settle correctly so there are legal agreements where the definition of truth and the definition of what needs to happen for them to be settled is very very detailed because the value in those specific agreements are in the billions tens of billions um in some cases and then there are institutions and applications and systems that have no idea of shared truth its just whatever people say is is um you know is is what people might assume is the truth without any proof whatsoever and then on the farthest end of this spectrum are outright scams where people told you something was the truth but it wasnt the truth and this is where a lot of solvency issues come come from where different organizations are no longer solvent because they simply lied about what the truth was so on these two dimensions of definitive truth to no shared truth and paper guarantees to cryptographic guarantees i think we can really deeply examine what it is that our industry does uniquely well what its doing uniquely well now and where it will be able to take society over time which i think is a very important point at the end of the day if you look at how many systems work today they are in the left portion of the graph where you essentially have paper guarantees right you have you have guarantees about a document that document can be memorialized in a web application such as in the case of wirecard or it can be a legal document such as in the case of enron or lehman brothers or it can be a collection of legal documents and digital documents such as in the bernard madoff um you know scandal and outright scam but but at the end of the day these are paper guarantees you you have a paper document that memorializes your relationship and you hope that that paper document has a solvent entity behind it and a legal system that can enforce your rights um in regards to that legal document thats fundamentally how the world has worked off until now in the left portion of the graph that thats what youll see if you take a look at the left portion of the graph in this vertical dimension of definitive truth to no shared truth you can have agreements that have extremely high definitive truth such as derivatives agreements and agreements about how something were to be audited or insurance agreements but if you dont have a system that enforces those agreements you can define them all day long but they can then fail right because the paper guarantees are probabilistic the legal system or the arbitrator or whatever system of contracts you use if its probabilistic you can define it perfectly but the the system might might fail right you you still have people trying to get their lehman brothers derivatives properly settled enron was a huge failure despite the fact that definitive truth took place and people defined what they were auditing and how they were looking at the organization you fundamentally had a failure because the system of paper guarantees failed right so really for a high quality agreement and reliable agreement you need to have both definitive truth and the system of contracts that guarantees the outcome of that defined truth right so so thats what the upper left quadrant teaches us in in in this graph in these two dimensions is that even if you define agreements they can still still fail if you use a probabilistic system of agreements that only provide paper guarantees on the lower part of the paper guarantee spectrum is where you have some of the scarier stuff thats where you have fake news thats why thats where you have outright scams like wire card thats where you have certain applications like robinhood that might say that they operate a certain way until theyre forced to prove it and then they operate a different way leaving many of their users to be insolvent thats where you have many of the outright scams in history such as bernard madoff and various other ponzi schemes you have people that fundamentally renege on their guarantees to their users and neither the paper guarantees of whatever legal system are able to to support the the users and able to re resolve the issues correctly and there is no real sense of shared truth to begin with so so the definition of the agreement from the very beginning was vague and this is the agreement that many people have with a multitude of different applications they use today whether those are media social media payment systems trading systems asset managers like bernard made up this is really the the vagueness of these agreements that in addition to not being correctly or clearly defined they are still in a probabilistic system that um that can allow them to fail because theyre fundamentally a paper agreement theyre a paper guarantee so this is the left side of the spectrum on the right side of the spectrum going towards cryptographic guarantees you already have a number of systems that use cryptographic guarantees to provide you with a sense of reliability namely messaging applications so many of the messaging applications people use whether those are whatsapp or telegram or signal or any number of messaging alternatives they are now almost all using end-to-end encryption and end-to-end decryption doesnt have any conception of a shared truth it doesnt say that something is right and something is wrong but it does provide you cryptographic guarantees it does give you a sense that your communications will remain private because they are encrypted in a specific end-to-end encryption process and because of the loss of faith in unencrypted communication systems and channels now many applications in the communications and messaging world use end-to-end encryption as a key selling point they didnt before decades ago they didnt they just said were a messaging application and were very fast and you can download the application but then the lack of cryptographic guarantees and the failures of messaging applications that didnt have end-to-end encryption became so apparent that users demanded a new minimum they demanded a new minimum standard for how communications happens namely end-to-end encryption and this is now a question that the vast majority of users of messaging applications ask they ask how is the messaging encrypted at rest how is it encrypted in transit how is the information im putting in this application kept private and the appropriate correct answer is end-to-end encryption which is a cryptographic guarantee so you actually already do have cryptographic guarantees permeating many many parts of your life and they have given you the kind of sense of comfort and psychological safety to use an application so this dynamic already happens on on the right side of the spectrum what were talking about in the blockchain industry and in the smart contract industry and in the dfi industry and in the web 3 industry whatever we want to call this industry thats quickly evolving and and clearly starting to impact peoples lives rapidly is applying this same type of cryptographic guaranteed dynamic to other very important parts of daily life various key transactions how society works and and various other key problems that on a case-by-case basis matter deeply to certain industries and certain categories of users but that might not matter to other categories of users right so does everybody get excited about derivatives contracts that are cryptographic guaranteed maybe not because they dont use cryptographically guaranteed derivatives contracts or derivatives contracts at all but i i can i can tell you that the people that do make derivatives contracts or the people that do care about insurance or the people that do care about whether their concert tickets are real or fake do really care when the reliable systems that guarantee the correct resolution of derivative or whether their concert ticket to their favorite show is a real or a fake all of all of those specific groups do care so what what you really see with implementation of cryptographic guarantees in the web3 world is a very specific set of applications and some of these applications are called d5 some of them are called nfts some of them are called tokenized ownership but these are the the very early examples of cryptographic guarantees making their way into peoples and industries daily operations but in specific industries in specific verticals but but lets look at how this evolves generally so lets look at the general categories of applications through which cryptographic guarantees are going to permeate specific industries and specific categories of human activity the first category is something we call uh trust minimized applications so trust minimized applications are actually a combination of cryptographically guaranteed systems definitive truth systems and centralized systems there are already a multitude of different users of chain link networks and users of blockchains that combine those systems with a centralized server so these are often cryptocurrency exchanges various other cryptocurrency cfi applications they create output in cryptocurrency and some of them have begun to adopt decentralized oracle networks as a data source which means that the inputs into those systems are also now cryptographically guaranteed this is a spectrum and there are some trust minimized applications that give you access to cryptocurrency that dont share with you how much cryptocurrency they hold they dont tell you how much is in specific address for your account and they kind of just hold it in ways that doesnt provide you a lot of cryptographic guarantees or definitive truth then there are others which provide you very clear guarantees about exactly what you own your private key might even control certain aspects of it and some of them are now adopting decentralized oracle networks as a way to get data in so the the new architecture that were seeing is a trust minimized application has a centralized core it has blockchain based outputs and it has blockchain based and oracle network based inputs so you cant really deviate very much when your central core has committed to something and the inputs are transparent and the outputs are transparent so the first stop is really trust minimized applications as we go up the the what we call cryptographic truth curve we start to see more and more decentralization more and more cryptographic guarantees until we eventually arrive at something called hybrid smart contracts hybrid smart contracts are things like defy decentralized insurance basically digital agreements that have been memorialized in a blockchain right so you have the actual conditions of the agreement in a blockchain that creates the on-chain portion of the agreement and then you have decentralized oracle networks such as chain link which provide the data and the inputs and the outputs and all the conditions under which the agreement is resolved and that combination creates hybrid smart contracts which are fully decentralized so this means that every condition of the agreement is defined up front achieving a very high level of definitive truth putting that definition on chain for everybody to verify the oracle networks and all the systems that are proving things to the agreement and controlling the agreement and allowing the agreement to do things are also very clearly predefined under what conditions does the crop insurance and a decentralized insurance smart contract resolve is very clearly defined there are these five data sources from five different weather data systems that if they say there was no rain then the decentralized insurance policies paid out automatically without any intervention without any any ability to even stop or reassess or minimize the payout from the policy because weve predefined what definitive truth is weve said theres you know five um data sources over there and those data sources are going to prove whether it rained in a specific geolocation and we as the contract participants are comfortable with that um very detailed definition of truthful of a definitive truth outcome and were going to write that in to a smart contract and to a set of oracle networks which are going to cryptographically guarantee that outcome and this solves a massive array of problems where you no longer have to rely on somebody changing what the truth is after something happens and that is enforced and guaranteed by these cryptographic guaranteed systems so basically just like the messaging application you use cant be compromised because it uses end-to-end encryption under the same set of encryption and cryptographic guarantees which are deterministic and are outside the scope of failure basically you can now have those same guarantees about the solvency of your bank the payout from your insurance company whether the concert ticket you purchased is real or fake whether or not you know various guarantees from various institutions are are going to be guaranteed whether or not youre going to be able to use a social media system in a certain way whether or not youre going to be able to use a trading system in a certain way in the past on the left side of the spectrum none of that could be guaranteed because it was all a probabilistic paper-based system where people controlled the servers people controlled the systems that allowed you to trade allowed you to use a payment system allowed you to execute a derivative your asset manager just held assets and you had no clue what was going on with them on the right side of the spectrum after you go into the world of cryptographic guarantees you initially see that there are impartial private key signing systems that allow the signing of messages and the communication of data in an end-to-end encrypted way and then you you really have to ask yourself well how can i get the same guarantees the same reliability the same infallibility for all the rest of my digital life for all the rest of my um you know interaction both with institutions and with peers through web platforms and thats what web3 provides it provides the ability to get a cryptographic guarantee and through oracle networks allows you to create definitive truth allows you to pre-define under what conditions you would like money in a certain bank and the second that those preconditions are not met a second that bank falls below a certain level of solvency your money can automatically be removed and automatically put into a more solvent bank which is exactly how d5 works right d5 is actually the best current example of this where if you look at how current banking system work banking systems work they work under a set of paper guarantees where nobody really understands what the solvency of many banks is audits happen on an annual basis or by biannual basis and even those are known to be inaccurate in many cases which is why there are constant solvency issues risk management problems and why using bank systems takes you know days to weeks on the other hand when you have cryptographically guaranteed systems such as d5 you can know everything thats happening with the defy application on a minute-by-minute basis the the the analogy would be if you knew every single thing happening at facebook day to day minute to minute every single decision that was made every internal process that was executed every single thing that their pieces of code did and every decision they made or if you knew that about how your bank worked or if you knew that about how your insurance company worked and everybody could monitor exactly what the insurance company was doing minute by minute with every policy that it wrote whatever decision that it made every policy didnt resolve likewise for social media platforms banks and everything else this is the big difference and the the difference is one that i think people need to to really wonder about and ask themselves why would somebody make a less reliable agreement if they could make a more reliable one that is the fundamental um truth of of this industry is that regardless of what its used for today whether its for tokens or nfts or or whatever collection of activities at the end of the day as web 3 approaches the speed the efficiency the low cost of web systems it has a guarantee that no web 2.0 system can ever have which is the trust minimization cryptographic guarantee it can guarantee you that your assets are safe that your assets are under your control that you know what is happening with your assets on a second by second basis you dont need to wait for an annual audit that might still be false just like in the case of enron and and these are the unique um properties of our industry and this is the unique direction that its taking the world its taking it into a direction where the false paper guarantees of of the past simply cant happen and i think the thing that everyone needs to ask themselves is whether this is a world that they find exciting i think its an extremely exciting world because what it means is that in a developed market you will no longer have these kind of false outcomes you you basically wont have the ability for outright scams like bernie madoff you wont have peop the ability for people to overextend themselves like lehman brothers things like enron and wirecard that were highly audited institutions simply wont be able to happen because everybody will be able to audit the data on a real-time basis and even various applications that promise you one thing and do a different thing like robinhood simply wont be able to do that because the systems that theyre built on will will force the application to work in the way that was promised to you and so this is the big shift from web 2.0 to web 3.0 that i think all of us should be extremely excited about and that our industry is is working on with this result but with this will result and eventually is a globally interconnected system of contracts that can be used by everybody regardless of country wealth or any other criteria so you will now have a system of contracts that is used by everybody globally whether youre in the poorest country or the richest country and those contracts will be enforced equally whether youre a poor single farmer in in some part of the world where you just want to sell your grain internationally or whether youre a large multinational grain purchaser you will have a single system of contracts you will not have any advantage in that system of contracts regardless of who you are whether youre big or small because that system of contracts will be cryptographically guaranteed just like nobody using an end-to-end messaging application has any advantage over anybody else because the system is completely impartial and enforced through encryption this is where the entire world will go and this is where our industry is accelerating it going and if this is something that you think is worthwhile a global system of contracts that creates transparency for developed markets and brings emerging markets from having no system of contracts for bank accounts or insurance or other things into a world where people can reliably utilize contracts to pursue their economic destiny whether domestically or across borders that is in my opinion a world worth working for and thats what were doing in this industry and thats what web3 blockchains smart contracts are about what theyre doing now tokenization nfts d5 is just the very very beginning it is the absolute early days of the internet where you had unencrypted email and e-commerce was just an early idea thats where our industry is and just like the internet took people from having no information having people that didnt have access to books were able are able now to get information from a phone that i use theyre able to get wikipedia and all the best worlds information because the internet gave them that and just like telecoms allowed people that never had a phone to have a cell phone and be able to call across continents this is the same level of magnitude change that smart contracts blockchains and web3 provides it will allow people that have no system of contracts no way to save money no way to get insurance to combat climate change as a farmer no way to counteract various adversarial economic dynamics and it will give them the same system of contracts that is so superior to what the developed world uses that both the developed world and the emerging markets were all beyond one global system of contracts all playing by one set of role rules that are cryptographically guaranteed through encryption and that have a single definition of truth that everybody agrees on is the definite truth the definition of truth that they want to use to resolve their agreements that is the amazing change in the world that our industry is um is creating i think the adoption of this change in the world is at a unique moment in history as well in the past there have been various categories of failures for what we call paper guarantees and weak paper guarantee systems i think we are at a unique point in history where some of the decisions to engage in more paper guarantees such as in the 1970s and then in 2008 with the global credit crisis have not made the significant enough impression of the dangers of engaging in paper guarantees and this this this set of graphics here where people essentially use paper guarantees use them to the point where they overuse them pause using them for maybe five decade five years maybe a decade and then take the the mantle up again and begin to use those p paper guarantees to extreme excess is actually the history of paper guarantees so if you look at the history of paper guarantees over thousands of years this is exactly the pattern the pattern is hey we made a new paper guarantee we should really be careful with it its really exciting people massively overuse it they massively over print money they massively over over create certain contracts then theres some kind of failure and that is essentially a warning signal to people and it says hey look this has consequences using paper guarantees in this form has serious um consequences that we need to be aware of and then throughout history consistently um we seem to just say itll be fine itll be okay lets do it again except we learned so much the first time lets do it 10 times more this time because you know last time um wasnt enough for us this is actually whats happening now in various categories of private debt public debt and and all kinds of other guarantees so i think were at a unique inflection point where people in various economies all over the world and in various categories of paper guarantees have simply decided to over stretch what a paper guarantees pasa is is is able to do and this has now led to the very very early signs of the consequences of doing this and those consequences are being seen in various specific contractual arrangements in things like real estate with evergrande and and other categories of agreements such as derivatives and and there are these extreme kind of jumps and outcomes but the most general jump in outcomes has really been inflation this is really what the the average person is going to be impacted by most is the impact of inflation um as well as the various other specific contractual outcomes in specific industries for specific entities but if we were to just think about inflation even just inflation as a paper guarantee basically reneging on its on its promises basically going in a direction that people dont expect it to go this presents i think a unique opportunity for the world to switch to a cryptographically guaranteed way of operating so i personally believe that for thousands of years before this point there was no alternative to how society could work how peer-to-peer agreements could work how institutions could agree with peers and with each other and for the first time in history we have a way to create cryptographically guaranteed systems that enforce certain minimums enforce certain relationships between peers between institutions between peers and institutions whether thats as something as simple as a concert ticket or whether thats something as important as a countrys you know 100 billion asset fund that uses derivatives to hedge against various negative outcomes and save the value of the entire countrys pension system what whatever um degree of of importance the cryptographic guaranteed agreement takes we now do have a way to create cryptographically guaranteed agreements and we have a more and more advanced way to do that those uh agreements are the better alternative that we now have as society as a set of internationally interconnected globalized systems and countries and institutions and i think that the oncoming inadequacies of paper guarantees are going to massively massively show theyre going to shine a very clear right a very clear clear light on the right way to do agreements being cryptographically guaranteed agreements just like the failure of messaging applications that had no encryption and no end-to-end encryption guarantees um eventually was a demand everybody had because there was a set of failures that that showed people how weak the guarantees of a system without those cryptographic uh additions was so so this is where i think were going and i think were at a unique inflection point in history and i think our industry is the industry that is able to take the rest of the world into a cryptographically guaranteed and cryptographically truth-based um set of contracts and really society and a set of societies that interact with each other in cryptographically guaranteed cryptographically truth-based ways this is why our goal in working on the chain-link network is to build a world powered by truth um i personally feel that a lot of people working on chain link feel that we are now at a unique point in history where you can build the world powered by truth and not a world powered by any one specific persons truth or any one specific groups truth but a world powered by a pre-agreed upon shared definition of truth that is then enforced and made immutable and made true because it is something that is cryptographically guaranteed so its cryptographically guaranteed in a system that cant be manipulated by any of its users and it has a new dimension of definitive truth enabled by oracle networks so that people can define what they think is a true outcome and that can be proven to them in a way that is infallible this is the unique place where i feel we are in history and this is why we in our work on chain link see ourselves as building a world powered by truth if we consider how this has been evolving there will clear be a very clear picture of the ev in the evolution of what a smart contract is so once again hybrid smart contracts are the pinnacle of cryptographically guaranteed and cryptographically truth-based systems but that is where were going thats the journey that the the industry and the world is on right now it might be useful for us to look at how that has historically evolved and and and also where thats going so historically you initially had really only one smart contract that smart contract was about tokenization it was about keeping a ledger of assets and who owned those assets and that was the only thing that there was and that was a single smart contract then the definition of a smart contract expanded to include multiple different contracts interacting with each other this is when more advanced smart contract platforms like ethereum and others came into existence uh bitcoin was the initial originator of that one smart contract and even on bitcoin you did have two smart contracts or more where you had the ability to do something like multi-signature so you pretty quickly had an evolution from just one smart contract about keeping track of assets to multiple smart contracts interacting with each other for distinct purposes and this isnt surprising because if you look at how web applications are built and how even the earliest web applications were built you saw the same dynamic you saw more and more distinct pieces of code acting as distinct services or having distinct separation of concerned roles whether it was a database or whether it was a piece of code or whatever it was you kind of saw a meshing and an integration of many different systems into more and more advanced web applications from the earliest days of the internet and so not surprising that this has been the evolution of smart contracts where while they were initially one contract that then evolved to be that contract plus a multi-sig plus a voting contract plus a few other contracts on one specific chain recently youve had a massive expansion in what defined a smart contract by including the worlds off-chain data this is the innovation that decentralized oracle networks are responsible for this is the innovation that we have massively moved forward in our work on the chain-link network and really the chain-link network launched uh the first decentralized oracle networks and really pioneered the ability to provide off-chain data in a reliable consensus-driven deterministic manner the the key point here is that you have a larger definition of what a smart contract is so now a smart contract is these two contracts or three contracts on a single chain but theyre using an off chain system that is also a trust minimized consensus based system that provides deterministic guarantees about the accuracy of in this case off-chain systems and off-chain data this was previously impossible because blockchains and smart contracts were not able to verify whether something was true and they werent even able to access external information for security reasons so the ability to provide external data into the smart contract systems and blockchains of the world basically gave rise to something called defy and this is the first category of what the centralized oracle networks and chain link networks were used for and are being used for today is the provision of highly validated data which basically means that the same way that consensus and multiple independent nodes generate a sense of cryptographic guarantees and encryption-based um guarantees for blocks and transactions of blocks in a blockchain you now have there is now and has been for some years now a way to generate that same level of guarantees about external data so what chain-link networks and decentralized oracle networks fundamentally do in the highly validated data category is they allow people to predefine that these 10 data sources will prove what the truth is they will cryptographically prove what has happened in each individual data sources case and then there will be a consensus mechanism and a decentralized computation mechanism which is the chain link network which are the chain link networks that come to consensus about all of that the first place where this has been massively used is price data and market data which is not surprisingly what powers defy so decentralized finance is really the first evolution of blockchains and smart contracts going beyond tokenization tokenization was the first big boom in blockchains and smart contracts where there was a massive influx of various tokens being created traded and owned for various reasons but decentralized financial applications while they can hold some of those tokens they are actually about creating um an agreement they are about creating a financial product that is fundamentally an agreement and those financial products are composed of two equally important parts one of them is the on-chain code the on-chain contract which is the cryptographically guaranteed agreement itself where the conditions of the agreement are defined and where the state changes of the agreement occur the other half of the d5 agreement the hybrid smart contract agreement which all of d5 is a hybrid smart contract um you have the oracle network the oracle network provides the massive um insight and connection and cryptographically guaranteed truth of what happened with something as simple as the price of a specific asset and you do need the price of an asset in order to make the vast majority of financial services in the vast majority of financial products which is why the vast majority of defy is indeed a hybrid smart contract powered by an oracle system this is the initial area that we focused on and is the initial area where we have now been able to achieve both a huge amount of data points on chain a huge amount of distinct oracle networks providing data and massive massive adoption that actually allows the d5 industry to scale over this past year we have been able to solve a massive scalability challenge in in the chain link networks ability to generate um many many different oracle networks and we in this case really means our larger community us as chainlink labs and a lot of different great people that were extremely grateful to for the collaboration and thoughtfulness that has gone into generating the systems that have allowed the chain link network to to go from um a few oracle networks to over 700 oracle networks the the chain link network is is really unique in that while many blockchain-based and decentralized consensus systems are focused on generating many many different shards many different side chains many different copies of themselves in order to achieve scalability over this past year the chain link network has been able to achieve this scalability by creating over 700 distinct oracle networks that provide over 700 distinct services so this i think is a very large milestone in the scalability of not only oracle networks but in the scalability of decentralized computing systems generally in addition to providing the scalability and the the the various many different ecosystem companies and chainlink labs working together to arrive at this massive massive growth there has also been a a huge uptake in the data sources that are willing and providing data to the chain-link network this expansion also underscores a huge collective effort by the community and various key players in the chain link ecosystem as well as the data providers themselves realizing that the smart contract economy that has been enabled by putting more data on chain has now grown to the point where some of the worlds top data providers see value and see the need to participate in providing data to the large and growing market so beyond the fact that the chain link network has launched massive amounts of decentralized oracle networks to meet the needs of top d5 decentralized insurance and various other smart contract products there has also been a massive influx of high quality data providers that can enable the new use cases that go beyond traditional d5 and traditional nfts and traditional blockchain gaming this is the other thing thats massively exciting from the point of view of highly validated data where not only do you have aggregations of data in oracle networks powering tens of billions of dollars in d5 smart contract value but you have top tier data providers seeing the ability to provide cryptographically guaranteed data as a new market and a new advantage for them which means that the size of the hybrid smart contract economy has reached a critical a critical mass a critical threshold where high quality data providers provide the data systems such as chain link provide the cryptographically guaranteed capabilities to send that data into smart contracts when combined with the smart contract itself enables entirely new capabilities and entirely new categories of smart contracts such as decentralized insurance specifically decentralized crop insurance which im personally very excited about because it allow massive amounts of emerging market farmers to counteract the effects of global climate change by engaging in cryptographically guaranteed agreements and those cryptographically guaranteed agreements will give them superior guarantees to the guarantees that farmers get in even developed markets and that will be a very clear sign of the mimicking of of of the massive impact of cryptographically guaranteed agreements because those farmers and those people in emerging markets went from having no phones to having cellular phones and they went from having no libraries and notebooks to having a device through the internet that provides them access to the best data the same data that i can watch on youtube the same data that i can read on wikipedia and now we as an industry are successfully utilizing the massive growth um of the of the blockchain industry and and and the community and the chain link network and and all of these amazing connections between data providers application developers like karbal and others now gives rise to the truly um impactful version of cryptographically guaranteed agreements that in my opinion can use tokens and can eventually be tokenized but make an entirely distinct value proposition that never existed before to parts of the world that would have to wait decades upon decades for anything approaching this and now they dont now they can have cryptographically guaranteed bank accounts cryptographically guaranteed insurance cryptographically guaranteed system of trade systems of trade that dont extract value from them but allow them to fairly trade in the global marketplace and all of this fundamentally creates a fair unbiased world where everybody can pursue their economic destiny on the same level playing field and that is the amazing thing that our industry is doing we are all working on in in the chain link ecosystem and what were all extremely excited about if you look at the amount of data that has been put on chain this um is really i think of one of the large precursors of of of what is coming because every single time that we have put larger and larger amounts of data there has been a jump in in the amount of smart contracts being built both in the variety of contracts and in the depth and quality of contracts we have now with the scalability released this year in the form of ocr not only been able to launch massive amounts of oracle networks right and and when i say we i mean our community all the node operators all the data providers all the amazing people working on making chain link a widely used global resource for cryptographic truth and all of those people together have now been able to not only launch a massive amount of data points onto many different chains over 10 blockchains but they have also been able to provide that data in various categories and new categories that were previously inaccessible and this was actually the exact problem that was initially solved for defy by the chain link network and by the provision of the initial decentralized oracle networks that chain link initially made available as a system it was the appearance of any market data at all and once market data and prices appeared on chain you then saw decentralized financial products being created out of nothing out of out of well not out of nothing but out of the amazing efforts of the the defy teams but a lot of those contracts had already been written and a lot of those contracts had already been built and the problem was the lack of data to trigger those contracts and to make those contracts come to life so for me the rate at which data is put on chain and the categories in which data is put on chain is actually very often a precursor to the growth of specific blockchain categories of usage and blockchain industry adoption by industry by vertical by contract type so im very very thrilled that the chain link network has achieved this level of scalability has put over a billion data points on chain and has put those data points on chain not only in price data but in various other categories that are now jump starting entirely new categories of smart contract usage such as decentralized insurance something that i think all of us in the chain link ecosystem and everybody in the entire blockchain industry should be proud of the next category of expansion for smart contracts is actually the hybridization of how a smart contract is built and you see this more and more and we see this more and more in in the chain-link ecosystem through the combination of multiple distinct oracle networks with individual smart contract applications right now there are multiple smart contract applications that are using multiple distinct oracle networks so they might be using a few oracle networks for different data but theyre also using different oracle networks for something like keepers and theyre using certain cryptographic signing solutions like vrf for random number generation the two first examples that we have gone into in in the category of off-chain computation have been the provision of random numbers and the provision of keepers which is an automation dev tools capability both of those have become massively adopted by a wider and wider array of varied users in the case of verifiable randomness what what has been seen by us in the chain link ecosystem and in terms of the chain-link networks usage is that there is a multitude of different use cases that essentially want to become provably fair and they want to become probably fair by guaranteeing their users with a cryptographic guarantee that the randomness used to generate the nfts to distribute the tokens to decide how the game outcome was played to decide how any number of outcomes were generated in the application are provably fair and provably fair once again means that theres cryptographic guarantees that can prove that something was generated at a certain level of accuracy and at a certain level of reliability and at a certain level of tamper-proofness that was previously not possible right now vrf has served over 2.5 million requests on multiple chains to many of the leading nft and gaming applications because those applications wanted to consistently prove to their user base that they were provably fair that they had a cryptographic guarantee that was generating a reliable source of basically trust and guarantees to their users and you actually see this in many of the users of vrf where they say to their users publicly that this is a provably fair game its a provably fair nft generation event its its guaranteed by this set of cryptographic guarantees from chain link vrf and and thats been quite amazing to see because it basically shows and in many cases proves that there is massive demand not only for the consensus around highly validated data but there is massive demand for the consensus around computations that smart contracts cant do and the massive adoption of erf is something that is is is only accelerating at this point um because once again cryptographic guarantees are where the worlds going many of these games nfts and and other and other categories of vrf users are in a market where they have a highly sensitive group of users right that their users are sensitive to cryptographically guaranteed systems and then and therefore they as consumers of cryptographically guaranteed infrastructure want to turn around and show their users that something is cryptographically guaranteed but once again i feel that the whole world will move in the direction that cryptographic guarantees are worthwhile and so we see demand for highly validated data and random number generation not only by highly reliable smart contracts and fully decentralized applications but also by trust minimized applications that want to prove to their users that the random number that theyre using in their game is computed in in a provably fair cryptographically guaranteed way because that has been a consistent problem in off-chain gaming systems and we actually do see multiple people adopting chain-link decentralized oracle networks for the purposes of proving to their user base that the data inputs into their settlement process are reliable so this acceleration doesnt just extend to decentralized applications it actually extends to all applications that want to provide cryptographic guarantees all of this is is quite clearly shown by the massive uptick in adoption so the massive massive uptick in adoption really has um three to four key categories one key category is the amount of github repos individual pieces of code and various smart contracts that are integrating all of the different chain link network systems whether theyre for data or whether theyre for off-chain compute or whether theyre from randomness or whether theyre for any number of collections of those services into one application and even in the last six months there has been a two-fold uptick in that the next metric that we tend to look at is the amount of partners and projects in the ecosystem both the rate and the quality of projects that are continuing to adopt chain link is is just massively growing over time um i think what weve seen is that the amount of partners and projects adopting chain link as a way to get their data into blockchains as users of that data as blockchain partners is is only accelerating which i think speaks to the massive um quality of what the chain link networks provides chainlink network provides um the next metric is some of the community growth the community growth of the chain link community itself as characterized by our annual conference the smart contract summit and as characterized by the amount of developers attending our hackathons has been um on a really upwards trajectory there has been a huge uptake in the amount of smart contracts summit participants and registered attendees the the chain link networks hackathons have now become some of the largest in the blockchain industry which which i think is quite uh quite amazing the key metric that i think is perhaps the most impressive and the most meaningful is the amount of value fundamentally secured by the chain link network the amount of value secured by the chain link network has had a more than 10x increase in this um previous year going from approximately 7 billion at the end of last year to over 75 billion at the end of this year this is because of the quality of the highly validated data provided to power defy which has also grown massively it is also because of the various new capabilities that the chain link network provides whether thats randomness whether thats decentralized uh off-chain compute um and also the various new categories of data so this growth is is actually just a sign of how much the chain link network is impacting all of these industries because at the end of the day um if you look at the size of d5 and you look at the size of some of the applications that use us and you look at the amount of value secured by the chain link network it it really makes the chain link network um probably the second most value securing system in this industry and and and that is something thats possible because of all the varied services and all the various capabilities that smart contracts need to consume from decentralized oracle networks and i think that this dynamic is only going to increase because we not only see existing decentralized um services users adopting more and more of chain-link networks and chain-link network-based services like data feeds we see them adopting a greater and greater amount of those categories of services and actually demanding and generating greater quality in those services in terms of data quality lower latency and any number of other features that they need to continue to expand their application right because they need to continue to to create higher and higher quality markets and more markets we also see a large influx of users utilizing multiple different chain link networks at the same time so there is actually a large influx in combining the use of a decentralized oracle network running in the chain link chain link format for data but also using a chain link network for keepers or using chain link generated random numbers or using chain link generated other capabilities and so now what we see is smart contracts that are actually composed of multiple pieces of on-chain code but also multiple pieces of off-chain decentralized oracle network code that all interact together and i think that the chain link network and our entire community should be very proud of not only the the fact that this much value is secured by the chain link network and not only that the existing categories of data consumption are continuing to grow massively but i think that all of the effort by us as a community and what we have done is a large community of data providers and node operators and developers and also the many users that give feedback and actually contribute to the improvement of various chain link networks have now generated hundreds of systems over 700 oracle networks that secure this value successfully in the face of various reliability challenges like congestion like flash loan attacks like flash crashes and exchanges all of which over this past year have left this value unaffected because of the collective we the collective collaboration between everybody in in in our ecosystem between node operators data providers developers users and everybody else and and so not only has the chain link network generated massively reliable um oracle networks in large numbers but the chain-link network has generated that while being able to stand up to various reliability challenges like congestion like flash loan attacks like flash crashes on exchanges or certain specific data sources which in my opinion is something truly to be proud of because scaling a system is one thing but scaling a system in a way in a community driven way that continually stays secure against various um various adversarial and reliability events that affect other systems but leave our systems and our user systems therefore unaffected is is truly amazing and thats what i think the chain link network and the community should be should be should be truly proud of this year weve seen a number of different uh decentralized services gain massive adoption and i think we as a community should be very proud of that in the future the the massive growth in various decentralized services coupled with the growth of various smart contracts and actually the emergence of more and more decentralized services driven by our community and driven by everyone working together to generate high quality data inputs high quality random number generation high quality off-chain compute is something that is going to continue to jump start those new smart contract verticals so so not only are the decentralized services created by the chain-link network and its community critical to to making all of these smart contracts happen but we actually as a community and as a network accelerate the creation of all those smart contracts to the benefit of those decentralized services that then get consumed in greater and greater number right they get get consumed more and more because d5 grows more dynamic enfts grow more blockchain gaming grows more centralized insurance grows more and both the breadth of new services and the continual improvement and quality of existing adopted services is something that i think the chain link network and the entire chainlink community should continue to focus on and grow which which i know that that we as a community and we as a network are doing in the coming year in order to create these new services and these new categories of activity that will jumpstart entirely new and innovative uses for smart contracts there are three key initiatives that are being planned for the chain link network and that are being planned for uh the coming year those key initiatives are the release of ccip the release of staking and the solidification of chain link as an abstraction layer for enterprises ccip is the application of chain links highly highly secure consensus mechanism that secures over 75 billion and has done that successfully for multiple years to the problem of cross-chain communications such that it is not just about moving tokens it is actually about communications this is the big distinction of what ccip does ccip will create many many distinct bridges and those many many distinct bridges will move tokens between chains and between applications but in in the opinion of many of the people building ccip that is a very very limited scope just implementing the ability to move tokens is really not enough to take our industry into a world of what we call cross chain smart contracts this is the third large evolution of how the definition of a smart contract will expand where the first evolution if youll remember from earlier in the presentation was going from one contract to two or more the second evolution was going from multiple contracts on a single chain to those contracts using trust minimized off-chain systems in the form of oracle networks to acquire data to acquire computation to interface with all of those systems reliably the third large shift and the third large expansion in how smart contracts are going to be defined is the creation of a cross-chain smart contract composition capability so so that you dont just generate a smart contract or a set of contracts on one chain and thats your smart contract you can now generate or you will be able to generate with the emergence of ccip in this coming year a smart contract that is actually multiple contracts on multiple chains interoperating with each other this will be another huge leap just like the generation of data has been a huge leap for the emergence of defy and the generation of random numbers and various off-chain computations in an oracle network has been a huge improvement for nfts and gaming the ability to create cross-chain smart contracts will allow developers and people building smart contracts to utilize multiple different pieces of code on multiple different chains just like they utilize multiple different pieces of code in multiple different clouds as web developers they utilize the service and the piece of code thats the best suited piece of code for a task that is how web applications are built and what i feel the chain-link network and the chain-link ecosystem will be able to do by providing this cross-chain capability will be the emergence of smart contracts into a much more useful format that format will be the cross-chain smart contract itll still be a hybrid smart contract because itll utilize off-chain data itll utilize off-chain compute in oracle networks whether thats for randomness or keepers or whatever other computations but you will actually have the ability to build smart contract applications the same way that web developers are able to build high quality web applications and at the most um general level thats what i think our industry and the chain link network and the chain-link system and we as a community need to really do we need to get the next million developers coming into the blockchain industry to build the way they are used to building in the web industry and the way theyre used to wielding in the web industry is very quickly at a very high quality and with very cost efficient and easily usable applications that is what we need to provide as an industry as an ecosystem as a community and while oracle networks for data provide that for making d5 applications and oracle networks for computation and random numbers can provide that for gaming and nfts the ability to stitch together multiple pieces of smart smart contract code on multiple different chains i think is going to redefine how people build applications in our industry because youll be able to use the chain that you want to use for what its good at youll be able to use certain main chains for the security guarantees youll be able to use other chains for certain speed or scalability guarantees and youll be able to use many other chains essentially as storefronts youll have multiple contracts on those chains for getting value from those blockchains users into what will essentially be one large smart contract composed of multiple on-chain contracts and multiple off-chain services providing both bridging in the form of communication and the ability to get data and the ability to do trust minimized off chain compute that was previously inaccessible but necessary this is the large innovation of ccip it creates what we feel is a cross chain smart contract stack that is going to have ccip as a key protocol at the center of it enabling communications then that protocol can be used on decentralized oracle networks like chain link and it can have key additional capabilities like the anti-fraud network to prove that the transactions going through it will be accurate and reliable this will enable various key innovations like programmable token bridges various cross chain bridges built by people in the chain link community and the chain link ecosystem and what were calling cross chain apps and cross-chain smart contracts all of which can still be used from the existing interfaces the existing wallets the existing systems as well as various enterprises and other existing web 2.0 systems i believe that this will complete um the three key categories of what the chain-link network and decentralized oracle networks do generally going from the provision of validated data to off-chain compute to chain communications such that you will be able to send messages between contracts for them to use each others services you will be able to send tokens between contracts with minimal additional work and this will give rise to cross chain smart contracts that are enabled by highly validated data and bolstered by the ability to get random numbers and keepers computations and various other advanced computations like fss in order to combat various other you know issues and and provide clear cryptographic guarantees to users this is where i think the the chain-link network is going this is where i think decentralized oracle networks provide a unique type of value to their developers and and developers users and i think this together will will herald in an entirely new category of more advanced hybrid smart contracts just like weve seen the initials initial versions of this with highly validated data and some randomness and some computation start to make more and more advanced d5 contracts but really that is just the beginning and i see this expanding far beyond that in the same way that the web world initially got some of its key services but then there was an explosion in services and that explosion in services was driven by um you know by the demand created by application this leads us into a discussion about how all of this adoption fundamentally affects the chain-link network and how all of this adoption fundamentally affects its economics i personally feel that the continual growth in smart contract dap usage and adoption will continue to generate hundreds and thousands of unique and highly useful and uniquely useful decentralized applications across multiple chains multiple block chains and layer twos i also see that our ability to provide data compute cross chain communications um and any number of other key decentralized services once again every key computation and piece of data that a blockchain cannot generate in and of itself as we provide more and more of that i think all of the fees from the smart contract dap usage continues to grow because the user base of the naps grows and therefore at the end of the day the dapps fees grow the the amount of daps and the fees paid by dapps for more services grows as they consume more services and as there are more applications to consume those services this creates a very logical dynamic where the fees from the dapps flow into the node operators in terms of this dynamic im im once again for this for this year as a milestone for this year im very proud to say that we have multiple chain link oracle networks that have now become profitable simply from the point of view of that fees this is a unique and uh special milestone in in my opinion because many if not all blockchain systems rely on something called a block reward many of them rely on it to over 98 with user fees only making up two percent some of them rely on it anywhere from 60 to 70 percent some of the more widely used systems we have achieved certain distinct oracle networks certain committees of nodes that are able to run so efficiently thanks to ocr have achieved efficiency because of the efficiency gains of the chains theyre on and have enough user demand happening quickly enough that they have um become completely profitable they dont require a block reward or an oracle reward of any kind to operate and this milestone has led us to to plan for stakings release in this coming year in addition to all the fees that are going to node operators there is now a kind of you know production possibilities frontier or a set of diminishing returns that node operators are starting to experience and i think well continue to experience and what this means is that many of our node operators have done such an amazing job integrating the best technology and the best practices and the best methods for keeping their nodes live that they are reaching levels of efficiency that at certain points have diminishing returns and at certain points um you know can can be approved upon only through certain means now no other oracle network that i know of has approached anywhere near this this type of security so at the end of the day this is a great achievement and this is why i think our nodes and our oracle networks are so preferred but wherever we are on the kind of security impact curve here it is safe to say that as the amount of fees grows which it is massively growing based on all the new dapps and based on all the larger adoption by smart contracts and based on all the adoption by um you know basically the world were seeing what we call the current and future fee opportunity continue to grow so the current future future fee opportunity is the fees that node operators can get by being top note operators in certain categories of computation whether thats data or whether thats computation whether its random number generation whether its cross chain services and in addition to being top note operators i think the size of the committees is going to grow and it is already growing so we will not only have higher quality nodes but we will have larger and larger committees for the more value securing transactions and categories of transactions but if we reason about this from from a purely economic point of view and we ask ourselves what is the most impactful but lowest costing security improvement we start to go up the security impact curve right we implement secure signing we get multiple data sources we have node fallbacks we have you know detailed monitoring and observability we implement various signing schemes and eventually we kind of hit a certain level of diminishing returns basically at a certain point of diminishing returns the additional security and reliability best practices that are implemented by notes will become a minimum because the fees will have grown to such a large point that not having that minimum not having a certain um secure signing capability or having multiple data providers or having certain fallbacks the fees will will justify that minimum of cost and that will that will be the minimum that nodes need to meet and many many nodes will meet it just like many nodes meet certain categories of security today the question then becomes what are the other categories that can allow nodes to gain greater and greater fees how do nodes acquire a greater portion of the current and future fee opportunity made available by all these decentralized services used by this glowing growing collection of dapps and growing collection of dap users and the fundamental answer that we have to that as described in our chain link 2.0 white paper is two two dynamics the first dynamic is node reputation and the value placed on that reputation so node reputation is the history of low latency accurate and service agreement meeting performance that those nodes have achieved so that means theyve been up during congestion that means theyve delivered accurate data that means they havent had downtime in normal periods of operation that means a number of key metrics which show that that node is the reliable node that is able to deliver highly reliable data through various adversarial periods and during daily operation right so so the better that a node is at uptime at resisting adversarial situations at delivering accurate information and doing accurate computations that is a clear set of differentiating factors an additional set of differentiating factors and possibly one of the largest differentiating factors will be the deposit so the staking deposit that nodes are able to provide and this is very similar to how blockchains work you have certain chains where you have a staking pool or you have individual stakers that provide a larger portion of stake and they get a larger portion of transactions and this is exactly the the same principle those nodes and those taking pools have more at stake and therefore they get to do more transactions so in addition to meeting the security and reliability guarantees that lets say the top 50 or the top 100 or the top 200 nodes meet to get into those highly lucrative highly future fee and current fee opportunity field oracle networks you will need to provide a reputation which will naturally happen if you perform well as a node operator and you in many cases will be able to get greater amounts of fees as a node operator that stakes or as a oracle network that sticks or its some kind of pool that sticks so at the end of the day you you arrive at a very similar dynamic where the ability to create a larger deposit amount gives you the ability to get more of this fee opportunity which actually contributes to you having a better reputation because youre doing more transactions youre proving more about yourself over time so this is the way that the staking incentives will work for individual node operators is that they will provide stake that will give security guarantees to various users those users will see those security guarantees and and and and want to deal with those nodes or those categories of nodes as oracle networks and this will propel those networks and categories of nodes towards a greater uh fee opportunity this is how in the long term we see we see staking work generally speaking what this means that as the fee opportunity grows and as more decentralized services are provided there is a greater amount of dap fees flowing into the system that is sent to the node operators as nota revenue and it is sent to stakers in order to basically make it so that stake is provided and those stakers can be any numbers of any number of groups it can be the node operator themselves it can be individual users that lend stake to the node operators it can be pools that provide stake to the node operators it can be it can be various categories of of groups and then these staking groups um will then receive the relevance taking rewards for providing that collateral and that deposit to provide those greater security guarantees in the same way that theyre provided in the worlds top staking blockchains this is something that we are planning to release or a version of this is planning to be released in this coming year we do plan to see staking and staking rewards being made possible this coming year and now that we have reached a certain level of profitability for some of the oracle networks in the chain link set of networks um we feel that its that its a good time to to do this this is obviously a very complex problem because just like oracle networks generate a unique form of decentralized computation different from blockchains the staking that is applied to that unique form of decentralized computation also needs to be unique and so we have been you know feverishly working on different aspects of staking and how to make sure that both the security benefits and all of the proper incentives are in place to generate the maximum pro maximum degree of security on an oracle network level it actually works in a very similar way so you can go up the security impact curve as you go up you achieve naturally diminishing returns marginal utility of each additional security impact could decrease but the cost might increase the future fee opportunity justifies that because it continues to grow and then you eventually arrive at a kind of plateau for traditional security best practices and here you can once again differentiate yourself as a network by being composed of nodes with the highest quality reputations and data providers with the highest quality reputation scores and you can provide um a sense of collective staking or a sense of collective deposit guarantees from your network and for your network in some form either through a pool or through or through some other category of mechanisms and this greater staking guarantee provides the security guarantees that users will need to say that network even though it has great security but practices even though it has great decentralization and high reputation scores is the superior network it it it has more stake it has more reliability it has more skin in the game and its more of a deposit has more incentives and at the end of the day that incentive just like it incentivizes proper operation in various uh proof of stake blockchains incentivizes proper operation in the chain link network and likewise the the people providing the stake and the people providing the computation are uniquely incentivized to do that in their own unique way all of this once again will move that distinct oracle network closer to capturing more of the current and future free opportunity which is um what they want to do and what they need to do um in order to to continue to to kind of get more revenue from the network right so the the massive gain of not only best practices not only good reputation but having a larger amount of stake than others will result in the same dynamics that you see in larger um proof of stake networks where a greater portion of fees is sent to those mechanisms at a certain ratio that determines the additional security provided by that stake at the end of the day um i think these dynamics depend on adoption they depend on fees they depend on the amount of daps they depend on the amount of users of those dapps they depend on the adoption of hybrid smart contracts and they depend on the adoption of trust minimized applications as a unique selling point to users beyond that i think there are a number of macro dynamics that determine the size of the hybrid smart contract market and the trust minimized application market the hybrid smart contract market right now if viewed as a percentage of the cryptocurrency industry is still below 20 that is unbelievably small based on the superior transparency user control and returns that d5 applications provide this means that if we are able to achieve profitability for some of the oracle networks providing data to d5 protocols today because ocr was launched and released reduced cost by 10x because chains are becoming more efficient and because the user base is growing and paying greater fees in aggregate through multiple users or as individual projects by using more services i personally believe that defy can easily capture anywhere from a quarter to over half of all cryptocurrency value because it is the superior way to utilize cryptocurrency as a yield generating mechanism and has any number of other properties in terms of transparency user control risk management so the market size just for hybrid smart contracts is still in its infancy and we have oracle networks that operate so efficiently that theyve already been able to achieve profitability in a market of this size with a total addressable market of over 2 trillion so at the end of the day i think the size of our primary user base which is hybrid smart contracts is set to become much much larger over time this is nothing to speak of when compared to the larger trust minimized application market and all of the value that will eventually migrate into smart contracts and hybrid smart contracts so if we look at the hybrid smart contract market the amount of value that can flow into it from derivatives equities gold and various other categories is um multiples multiples of what it is now even at small percentage points of those markets not to mention that many of those markets are now moving towards becoming more trust minimized by consuming decentralized services to prove things about themselves to their users eventually this is the world we arrive at we arrive at a world where trust minimized applications are not enough this world may take a number of years i dont know exactly how many years because im extremely excited about blockchains and smart contracts and every single year is the year that theyre going to go big and im always excited about them endlessly but this is definitely in my opinion where things are going over a multi-year trajectory this is over one quadrillion dollars in value and it is basically all of the worlds value um if you include everything else thats not on here if you include ad networks if you include um global trade supply chain data everything that needs to be trust minimized because the fundamental question is if if you could provide people or enterprises or web applications or web application users the same exact agreement the same exact interface the same exact cost the same exact speed and a trust minimization guarantee a reliability guarantee that means the contract will operate as expected why would they ever choose something that doesnt provide that but does everything else you you you have a fundamentally superior property that web systems can never acquire but web 3 systems can acquire all the properties of web 2 systems they can acquire all the speed they can acquire all the usability they can acquire everything in fact many of the existing web 2 interfaces are going to be how the web 3 systems are are utilized so at the end of the day the the fundamental question is not why would this happen its why would anybody in any of these industries choose a less reliable contract all things being equal and the answer is i they wouldnt because as rational economic actors everybody would like the more reliable contract this leads me to the third and final thing that i think chain link and the chain link network will become over time initially the chain link network began as a set of decentralized services that are provided to the worlds top smart contracts in categories like d5 nfts blockchain gaming decentralized assurance and many others that the chain link network and its many different decentralized services and network help jumpstart that in my opinion actually helped jump start the blockchain and smart contract industry into what its going on to be today the second thing that the chain link network is now becoming in addition to the decentralized services is a single interface through which all enterprises and web 2 firms can efficiently utilize all blockchain systems and all smart contracts on all blockchains and layer 2s even including central bank digital currencies assuming that they go on a blockchain and to do that in an efficient reliable way that allows them to scalably utilize all the blockchains from all their counterparties all at the same time that is what i believe is coming in this coming year in the following years as enterprises and web 2 firms need an efficient way to interface with blockchains the the third and most important thing that i feel um the chain link network is generating is a truth machine the truth machine is actually what i feel most excited about and what i think will create the largest impact on society and many different societies globally and actually how those societies interact with each other because there is a deep-seated problem when we as a society or as a set of global societies cannot agree on what the truth is and in many cases that is not possible in agreements that fail in many other cases its not possible between institutions and i sometimes feel that its not even possible at a societal level and that is a very serious problem thats a problem thats worth solving its a problem worth working on um and its a body of work that i am personally very excited to be to to be a part of and im very grateful to be working on with the amazing people in the blockchain industry and the amazing people in in in the chain link community and ecosystem and i feel that we all have an important role to play in in how we as a large group of developers and academics and security researchers and node operators and data providers and even average community members can once again impact the world in this critical critical way where we take the world from something powered by paper guarantees and no shared truth to a world powered by cryptographic guarantees and definitive truth that is the body of work that all of this is about i think the chain link network and we as a community and we as an ecosystem have an important role to play in that and im extremely proud of the immense work that weve been able to do as a large group of people working together during this past year the amount of value that the chain-link network has secured the amount of networks that have been launched in the scalable way the reliability and security guarantees that weve provided and not only the breadth of data but the continually increasing quality of data and quality of computations from top partners not only the highly validated data and extreme quality of computations that weve been able to provide but also the reliability and security guarantees has really reached and a previously unreachable point and if we continue to reach these new heights in providing cryptographic truth um i think itll continue to enable our industry to do more and thats what im extremely excited about doing if this is something that youre excited about if youre excited about creating a truth machine allowing the worlds enterprises to engage in using cryptographic truth to provide their users the guarantees that theyll soon and already are demanding of them or if creating the worlds decentralized services to take smart contracts into a new age of usefulness is enough for you please contact us we are growing rapidly at chain-link labs um chainlink labs has a unique approach to working together that i think has been working very well over time i think its amazing how weve been able to help build a great open source uh software in the form of the core chain link software and some of the other additional protocols around chain link at chainlink labs there is something called an idea meritocracy where we make systems and processes to make sure that the best ideas win and that the newest person or the person whos been working here the most junior person the most senior person all allow their great ideas to be heard and acted on and uh working with human collabs is a completely remote working experience that weve been doing from the very beginning so we know how to do remote correctly and we have a very high trust high autonomy remote working dynamic where people who know how to do remote work are able to do it in the right way and people that dont know how to do reward work um can learn how to do it in a really efficient correct way so youre welcome to join us at shaneland labs if you find this exciting and interesting and beyond that i want to thank everybody whos been working with us in all the different ecosystem companies in the chain link ecosystem all the different node operators data providers and all the different community participants that have supported us in this past year and in the past years and are going to be working with us in the coming year thank you In this presentation, Chainlink Co-founder Sergey Nazarov discusses the fundamental need for deterministic cryptographic truth over the current system of probabilistic paper-based guarantees, and how Chainlink is facilitating this crucial societal transition. Nazarov explains how Chainlink has come to secure over $75 billion by providing secure and reliable off-chain data and computation services to dApps, and then details plans for cross-chain interoperability using CCIP, the upcoming release of staking, and the use of Chainlink as an abstraction layer by Web 2.0 and enterprises. 0:00 Why Cryptographic Truth Is the Future of Agreement 21:52 The Benefits of a Globally Interconnected System of Smart Contracts 24:50 The Dangers of Paper Guarantees 30:10 How Chainlink Is Building a World Powered By Truth 37:35 Past Growth and Future Trajectory of the Chainlink Network 58:10 The Cross-Chain Interoperability Protocol CCIP and Cross-Chain Smart Contracts 1:05:31 Staking and Oracle Network Economics 1:18:22 The Market for Smart Contracts 1:23:09 Chainlink as a Cryptographic Truth Machine Chainlink is the industry standard for building, accessing, and selling oracle services needed to power hybrid smart contracts on any blockchain. Chainlink oracle networks provide smart contracts with a way to reliably connect to any external API and leverage secure off-chain computations for enabling feature-rich applications. Chainlink currently secures tens of billions of dollars across DeFi, insurance, gaming, and other major industries, and offers global enterprises and leading data providers a universal gateway to all blockchains. Learn more about Chainlink: Website: Docs: Twitter: Chainlink smartcontracts blockchain blockchain,Chainlink,smartcontracts,