Chainlink co-founder wants web3 to provide crypto collateral to the world

Featured Sponsor

Store	Link	Sample Product
UK Artful Impressions	Premiere Etsy Store

welcome back to Chain reactiona podcast that interviews crypto newsmakers to better understand the technology behind the hype and the people working to build a decentralized future.

For this week episode, jaquelyn interviewed Sergei Nazarovco-founder of Chainlink, a protocol that provides an Oracle network to power smart contracts.

“Oracle networks are really what puts the word ‘smart’ in smart contracts,” Nazarov said. “The smart contracts themselves don’t know what time it is; do not have the ability to access any external system […] other than what’s on a blockchain.”

Before starting Chainlink, Nazarov co-founded four other companies, the most recent of which was SmartContract, which also focuses on smart contracts.

Chainlink is also known as a web3 service platform that connects people, companies and data with the web3 world. And for good reason: the platform has enabled over $7 trillion in transaction volume across DeFi, gaming, NFTs, and other major industries.

When it launched in 2017, the total value locked (TVL) across the entirety of DeFi was “well under $100 million,” Nazarov said. By the end of 2021, that figure had risen to nearly $200 billion, though it has since fallen to $47 billion today, according to DeFiLlama. data.

“When an Oracle network goes live on a certain chain and provides data to it, the full value of that chain is locked in advanced applications, like advanced gaming applications or DeFi applications, it skyrockets,” Nazarov said. “And ‘it shoots’ doesn’t mean it doubles; means that [grows] more than 100 times.”

For blockchains to create advanced applications, they need advanced inputs and outputs, Nazarov said, pointing to how Uber couldn’t exist without other systems handling a large part of the workloads and problems it encounters. “Without those APIs, you can’t build an advanced application,” he added.

Web 2.0 versus web3

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

What does that mean? Well, at any time, an entity like Silicon Valley Bank you can “change the rules and then you have a tough situation,” he explained.

Until SVB’s collapse, many people thought the banks were defaulted, Nazarov said. “They felt that banks would always behave in a predictable and repetitive way that they understood. But now, I think people realize that banks are probabilistic and there’s a chance that they won’t behave in the way that people expect because [of] a lot of human-based decisions and legal promises that aren’t really guaranteed.”

So how can the world become more trustworthy and secure?

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

In the web3 world that uses smart contracts, there is no capacity for human choice or the legal system, Nazarov noted. “There is only a technically applied system of contracts.”

In addition to a number of topics related to smart contracts, technology guarantees, cross-chain interoperability, and Nazarov’s long-term vision for Chainlink, we discuss:

• Unexpected use cases of smart contracts
• How traditional companies can tokenize assets
• AI and blockchain technology
• PICC updates

Chain Reaction comes out every other Thursday, so be sure to subscribe to us at apple Podcast, Spotify or your favorite pod platform to keep up with the latest in web3 and crypto.