Every New Chain Makes Chainlink Stronger

Transcript

So, more chains, more bridges, more advanced contracts, more data, compliant and legally binding agreements that comply with identity, identity data, and identity proof. >> Welcome to the Rollup. We talk to the biggest [music] and brightest minds in fintech. Enjoy the show. Don't forget to like, comment, and subscribe. >> It feels like as we accept that the financial on-chain environment is multi-chain, whether it's off-chain to on-chain or if it's just coordinating connectedness across chains, this is where Chainlink plays a role.

And so, how how should we think about Chainlink in 2026? Is it still an Oracle system? Is it interoperability? Is it something else? So, data going on chain or interoperability between chains or interoperability with existing accounting systems, all of these are problems that need to be solved for advanced smart contracts. Simple smart contracts where you're on a single chain and you mint a token and you send the token to another person on that chain and that's it. There's no data, there's no movement across chain, there's no identity, there's no compliance, there's there's none of these things needed. That is what a chain does on its own. So, the way to think about Chainlink is that Chainlink

adds everything else that chains need to do advanced transactions, advanced smart contracts, advanced transactional flows. And now what's happening, and you can see this in the DTCC app chain um collateral management example in the diagrams there, and you know, what we've shown there with Fulcrum and how that works, is that these flows are now getting moderately advanced. So, now what you're finding is that, okay, I have chain A and chain B and chain C and then there's going to be a chain D and a chain E and F and there's all these chains and the chains are getting simpler to use and cheaper to use and easier to implement.

But, as there's more chains and as the contracts on the chains become more advanced, I have a bigger and bigger need for more and more of what Chainlink does. So, more chains, more bridges, more advanced contracts, more data, compliant and legally binding agreements that comply with identity, identity data, and identity proofs. So, I would not even say that we're at a point where the contracts are very advanced. I would say we're in the early to early mid version of advanced.

Yeah. And so, what we're going to see now and and that's because they're they're not even that widely used yet. Once the early versions of the contracts start getting used in scale, everyone's going to start getting creative and they're going to say, "How do I make my contract better? How do I make my tokenized equity better?" Exactly. And and that's what you also saw in DeFi. So, as things got more advanced in DeFi, Chainlink only became more important. But, this place is in in like the DeFi life cycle timeline, this place is in like the first year of DeFi being on production. You see?

So, while there's more chains, more contracts, more advanced contracts, more systems to connect to the contracts, Chainlink is the layer above and between the contracts that lets them do those valuable things. And personally, I think that layer will be quite valuable and important because the the complexity and the cost of having the chain will go down. But, the more chains there are and the more things you need to connect to the contract then to the chain, the more important Chainlink is.

>> And you anticipate that happening off-chain and settling on-chain. Well, actually it's it's interesting because in many cases you have something called digital twins. So, you have the need to do accounting back to your traditional systems and you have to do that because the regulations only allow the final control look what's called control location and the final settlement to be off chain in the place that the law says is acceptable. >> Okay. >> That will eventually change. >> As the laws change? >> Yeah, as laws and regulations change. And so eventually you will have all settlement on chain. There are use cases where you have settlement on chain and that's been made legally binding. But then even that you need to synchronize back to the traditional system.

And so that settlement often needs data. That settlement often needs to do settlement across chains. So for example, the DTCC collateral management is not really settled until the obligation is closed out on both Ethereum and the app chain. >> Huh, so that's an example of a digital twin. You have the DTCC collateral app chain and you have the Ethereum instance and these need to tie out in order for that ultimately to settle. >> Sort of sort of digital twin will actually be what the app chain run by DTCC needs to synchronize back with the DTCC's own back end.

>> Okay. >> That'll be a form of digital twin. >> Okay. >> The stuff between the app chain and Ethereum is what we call it mirroring or we call it creating certain loan obligations and representing loan obligations. But in theory it's similar but the differences between two chains and a chain and a existing accounting system. >> But the important point there really is that Chainlink solves both of those problems and it solves those problems in a single flow. You see? >> The netting, the tying out between all those mirrored instances.

>> Right, between those mirrored instances. In DTCC's case, we're primarily focused on the app chain to Ethereum. >> Right. >> But in many other cases it's also the chain of the institution, it's Ethereum and it's their accounting systems. All all of these things are just getting more complex is the point. So, that's why Chainlink keeps changing what people understand it as because the initial core problem of advanced smart contracts was I need data. >> Right. >> And so, Chainlink solved that problem. And then, the big problem was I need reliable bridging. And so, Chainlink I solved that problem, right? Cuz Chainlink doesn't lose $290 million.

Chainlink doesn't lose $320 million. That's how you solve that problem. And now you're moving on to identity, this digital twin and accounting problem, um orchestration, which is what CRE does, which is just a catch-all for basically all the other compute that you need off-chain to be reliable. And so, eventually Chainlink will be known for solving that as well. But then, let's say a new problem appears, like how do I get AI agents to efficiently interact with tokenized cash, whether that's a stable coin, a tokenized deposit, or a CBDC. >> Yeah.

>> Well, actually CRE is already optimized for AI usage. And so then, if AI agents become a a widely used resource for interacting with on-chain cash and tokenized assets, then I think Chainlink will be the interface layer for those agents. But Chainlink will continue to evolve and become whatever is needed for advanced smart contracts. >> That's That's what I'm understanding. And so, to to sum all this up, the North Star here, right? If there's one metric that guides your principles as a founder, as you run Chainlink, it sounds as if it's the continuous advancement of smart contracts.

>> Yes, that's exactly it. I I think it's it's hard to explain because smart contracts are complex and people are only interested in smart contracts in relation to the one thing they're doing now, like DeFi or tokenized funds or tokenized equities. So, people's understanding of smart contracts is very narrow. But, you know, we had this site even before Chainlink called smartcontract.com. And so, we were working on smart contracts even before Ethereum and even before a lot of other things that exist now. And so, I have always been enamored with smart contracts. But, my definition of smart contracts is not just code that runs on a chain.

>> Right. >> It's code that can automate in a cryptographically verified way key operations. >> Okay. >> Now, granted now it's all about key financial operations. >> Mhm. >> But, it's not just about I have a signature, the signature signed something and moved something on a chain. That for me is a very limited understanding of a smart contract. What would we have, for example, with the DTCC app chain is an example of a moderately advanced smart contract. But, it's going to get even more advanced.

And I think as it gets more and more advanced, Chainlink will provide more and more things. And the reason Chainlink was chosen, just to be clear, is that it's reliable. Because these inputs cannot be unreliable. Because if they're unreliable, then the whole contract is unreliable. >> Right. >> Does that make sense? >> Yes, because ultimately the weakest link is the one that, you know, this is what we're measured by. And so, it's important that everything uh is resilient and secure and uh is held to a high standard.