Chainlink, the decentralized oracle network, has been connecting blockchain to external off-chain systems. Most importantly, it enables this without compromising the security and reliability of the associated blockchain. Addressing the audience at Smart Contract Summit 2020, Chainlink CEO Sergey Nazarov explained how the project is creating definitive truth, which is basically data you can trust. He also explained why this indisputable definitive truth is so crucial to exponentially enhancing the capability of a smart contract economy.
At the summit, Chainlink announced the acquisition of DECO, a privacy-preserving oracle technology from Cornell University. Basically, by combining Chainlink’s network of decentralized oracles and DECO, a wide array of datasets can be brought on-chain. This will also include premium, private, and unique market datasets for the exploding DeFi ecosystem.
Smart contract economy to global economy
According to Nazarov, blockchains generate the strongest version of definitive truth. However, blockchains like Bitcoin and Ethereum are capable of generating definitive truth only around on-chain data. What about the off-chain data? Chainlink solves this problem as it generates definitive truth about real-world data and events. Moreover, this expands the capabilities of smart contracts. This is because trustless automation of agreements that require both on-chain and off-chain data becomes possible.
DeFi loves Chainlink
The dual-sided definitive truth provided by Chainlink has found its application in the Decentralized Finance economy and this has, in turn, driven Chainlink’s growth. Some of the most adopted DeFi projects like Kyber Network, Crypto.com, Synthetix, AVA, and more have turned to Chainlink.
The smart contracts will drive the global economy
According to Nazarov, definitive truth driven technology offers many advantages. These are low counterparty risk, consistent high-yields, and built-in security. These advantages offered by definitive truth will lead to a global economic shift. In the near future, smart contracts can drive the global economy rather than the existing brand-based contracts. And we are already seeing major firms like MicroStrategy moving towards crypto adoption.
DECO for DeFi
The acquisition of DECO by Chainlink means a lot for the DeFi world. Furthermore, DECO can be used to prove collateral solvency for DeFi confidentially. Along with that, DECO users can confidentially prove their identity and bank balance to AML/KYC-compliant DeFi applications.
Another advantage of Chainlink is that enterprises can sell their datasets and APIs to smart contracts. This is a highly scalable approach that can move all the data across the globe on-chain, and Chainlink can act as an abstraction layer.
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