"Hybrid Smart Contracts" Will Change DeFi and the World, Says Chainlink CEO
When the financial system fails again, DeFi should be prepared to rebuild it from the ground up.
- The Chainlink 2.0 whitepaper was released this week.
- It details further integration of off-chain systems into on-chain smart contracts.
- Sergey Nazarov believes DeFi will eventually become the cornerstone of the financial system.
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In a recent interview at BlockDown 2021, the co-founder of Chainlink detailed how the current macro environment is bound for a steep crash akin to the 2008 financial crisis. At that point, Sergey Nazarov believes DeFi will be the only alternative.
Chainlink CEO Introduces “Hybrid Contracts”
Chainlink published a monumental 100 pages long whitepaper named “Chainlink 2.0.” on Apr. 14. Yesterday, the founder and CEO of Chainlink, Sergey Nazarov, detailed how this upgrade would finally bring DeFi to the world.
A smart contract is a codified agreement on the blockchain. Through oracles, smart contracts can confirm conditions that are not themselves verifiable on the blockchain. It is the bridge between real-world events and lines of code.
Imagine an insurance contract that would reimburse a farmer if a certain threshold of rain hadn’t been met. Using oracles, contracts can integrate external information, such as rainfall or any other externality. Chainlink performs this critical task for many projects in the ecosystem, including Sushiswap, Kraken, and Nexo Finance.
With Chainlink 2.0, the project’s latest upgrade, Nazarov said that Chainlink would scale hundreds of off-chain systems to thousands, allowing for more original use cases and adding greater functionality to current smart contracts and decentralized apps.
Still, the true goal of Nazarov isn’t simply to improve Chainlink’s functionality. The CEO thinks that DeFi, smart contracts, and blockchains have the potential to completely change how we think about contracts, agreements, and the global financial system.
Chainlink’s objective, he said in the interview, is to create true transparency in any contract between individuals or institutions.
For Nazarov, the monetary policy of central banks and governments worldwide are once again threatening the pillars of the economic machine. Once people realize that inflation is chipping away at their wealth, another crash can be expected.
At that point, he hopes, DeFi will offer a clear alternative.
Chainlink 2.0 is a step in this direction. Only time will tell, however, if Nazarov’s predictions will come true.
Disclaimer: The other held BTC, ETH, and a number of other cryptocurrencies at the time of writing.