(upbeat bright music)
- Hi everybody, and
thank you very much for,
for coming to our conference.
I think it's been an interesting day,
and now the rest of the day,
I think today is gonna
be equally interesting.
So at this conference, I'd
like to speak to you about
some of the views I have
on what Chainlink does,
and how it's evolving,
and some of the technologies
being included into it.
One of the most useful and simpler ways
of viewing what we're doing,
is the creation of Definitive Truth.
So Definitive Truth for me is really
what Blockchains generate in general,
they generate a final immutable record,
that can't be changed, can't be modified
or improved in any way to
anybody's individual benefit.
And the fact that they generate
this uniquely immutable record,
makes it essentially true.
And then that truth is confirmed
by many different independent sources,
many different independent
machines, and in my opinion,
I think intuitively
would one of the things
that attracted me to Blockchains,
and one of the things I
continue to find quite unique,
is that because they generate
all of this agreement
through decentralized computation,
and these tamper-proof methods
of coming to agreement,
using various cryptographic proofs,
they create the strongest
version of Definitive Truth,
that are currently out
there in computing systems.
And it really forces you to think about
what can Definitive Truth
enable all of us to do,
in the computing sphere, in the web world,
in the Blockchain world,
and that's part of what
we'll be discussing today.
I think the important thing is
to really look at once again,
there's assumption of
what is Definitive Truth,
and how do Blockchains and Bitcoins,
initially take us in this direction
of generating Definitive Truth.
I think the first premise is that
you have an unbreakable chain of events,
that is cryptographically secured,
and that unbreakable chain
creates an immutable,
permanent record that is
considered definitive.
And then the truth of
it is assured through
its confirmation across
multiple, different machines,
and it's eventual memorialization
after a set period of time as being true.
And so once again both
through cryptographic means,
and through extreme degrees of consensus,
among a multitude of different
independent node operators,
you arrive at both something
being definitive and true,
and so that's why I see Blockchains
and decentralized computation in general,
as giving us a pathway,
a new unique pathway to Definitive Truth.
If you actually look at
different Blockchain systems
through this lens,
you'll start to see that
they provide different
variants of Definitive Truth.
Bitcoin, for example,
provides Definitive Truth
about Bitcoin ownership.
And that creates a very reliable asset
that somebody can own, in a
way that they couldn't own
an asset previously throughout history,
short of having diamonds or
gold bricks or something,
in their possession.
And the uniqueness of Bitcoin
is really the fact that
it has a definitive,
immutable nature to it
that says if you own a
Bitcoin you own a Bitcoin,
and that's beyond anyone else's control,
it's beyond governments' control,
it's beyond an institution's control,
it's beyond anybody's control.
And that's once again based
on cryptographic proofs,
and the fact that in this case,
what you're seeing here
is the pool of full nodes
that are confirming the truth of Bitcoin.
And so they after a certain
amount of committed blocks,
people come to assume that
yes, this is the truth,
this is the definitive, immutable truth
about the ownership of this asset Bitcoin,
and nobody can change that
truth to their unique benefit.
And this is kind of in my eyes,
one of the ways of defining
the unique innovation of
Bitcoin and Blockchains,
is this immutable, permanent,
and highly validated truth
about, in this case one thing,
the existence of a Bitcoin,
and the ownership of that Bitcoin
by a specific private key.
When you extend this lens of
viewing Blockchain systems
onto something like Ethereum
or other more complicated systems,
and Ethereum is also quite
useful and complicated,
but the real lens that you
start to see this through
is that you see more transaction types.
So what you start to
see is a large multitude
of different Smart Contract
states being confirmed,
and these Smart Contract
states being confirmed,
now generates a new form
of Definitive truth about,
in Ethereum's case a
lot of token generation,
token movement, voting, and
various other now DeFi product,.
so you have Smart Contracts
state being confirmed,
and it's not just about a single asset,
it's about a multitude
of different assets,
and now also interest on those assets,
and various other activities
with those assets.
So now you can view Ethereum
as creating Definitive Truth
about Smart Contract state,
that's more expansive,
and more complicated
in that it can enable more
types of Definitive Truth
in the form of on-chain-data.
What we Chainlink do is,
I feel that we generate Definitive Truth
about real world data,
and real world events.
And we generate that Definitive Truth
to a sufficiently high threshold,
for it to be useful by Blockchain systems,
by these mission-critical,
highly-reliable,
highly relied upon,
value-securing systems.
And so the question then is what happens
when you have on-chain-data
that creates Definitive Truth,
about token movements or token ownership?
And what gets added to that
when you can do Definitive Truth
about real world data and events?
And that's really kind of
the new exciting world,
that we're all working towards,
and we're seeing evolve before our eyes.
What we really do is we
generate this Definitive Truth,
so we take the world's data sources,
we take various events out in the world,
and we essentially prove them
to a sufficiently high standard,
that they can be used by Blockchains.
And I think the nuanced point here,
is that Blockchains can
create Definitive Truth
about what's inside of them already,
and this is things like
Smart Contracts state,
that are published into them
or private key signatures
or token movements.
But Blockchains do not know,
and cannot create Definitive Truth
about things outside of them,
that's just the way that they're built,
it's part of the security
assumptions inherent to them,
and it's part of the reason
that they get the extreme
reliability guarantees,
that we seek from them, right.
It's part of why they're able
to create Definitive Truth,
is that they focus on the
creation of Definitive Truth,
at this layer one level of on-chain data.
This is known as the Oracle Problem,
and it's a problem that
we're successfully solving
at this point with the help of Chainlink,
and decentralized computation
in the form of local networks.
But once again it's
important to understand that
you have a very large
innovation in Bitcoin,
in the creation of Definitive Truth
for the ownership of an
asset namely Bitcoin,
you have Definitive Truth being extended
with systems like Ethereum,
and other systems that now
extend that Definitive Truth
to various other states,
Smart Contract states
about assets or about new
tokens or about trading,
but that does not extend Definitive Truth
to all the external events
that you would wanna
write a contract about.
And it is in fact, also quite important
to understand that the
universe of contracts
that is out there, is really
not only defined by ownership,
and token generation, and
private keys, and voting,
a lot of contracts are really about events
in the real world happening,
a market price changing,
the delivery of a good, some kind of event
with collateral or somebody
approving something,
at the end of the day,
you really have two parts,
two most automated digital agreements,
you have the system of record,
and the system that actually
processes the logic.
And then you have the system
that feeds the triggers,
and feeds the data that
allows the Contract
to evaluate what happened
against these conditions.
And this is where we fill in
a uniquely important piece of the puzzle,
around how do you provide the
same level of Definitive Truth
about the real world,
to meet the high standards of Blockchains
and Smart Contracts, and
extend their capabilities,
while extending them
you'll still wanna maintain
their security and reliability,
because that's a critical
component of how they function.
And so this is I think,
the large body of work
that we're involved in.
And I think Definitive Truth
is just one way to phrase it,
but it's a way of phrasing it
that I've been becoming more,
and more attracted to recently,
due to partly its clarity
and partly an explanation,
to people about why would
Blockchains, and Smart Contracts,
and decentralized
computational systems do,
is actually quite unique and important.
And it's gonna become
more and more important,
as Definitive Truth becomes
more and more in demand.
I think we can already see
the combination of Smart
Contracts and Oracles,
to create new versions
of universally connected Smart Contracts,
in the case of DeFi.
So DeFi is really the
composition of Smart Contract
state systems like Ethereum,
together with Oracle mechanisms
that, like Chainlink, that
use decentralized computation,
to arrive at answers
about Definitive Truth,
in regards to things like market prices.
So you really have DeFi
evolving almost in lockstep
with the amount of data
that's available to it.
And as we add more and more data,
you have more and more
products, more and more markets.
And that's something
we're thrilled to enable,
because what it means
is that Smart Contracts
are now evolving into something
that can also generate,
that can generate tokens
and move the tokens,
but it can now move those tokens
into more advanced financial products,
that interact with external data events.
And that's really when
you reason about DeFi
as the beginning of this trend
towards universally
connected Smart Contracts,
I think you'll see that each DeFi product,
that does something new and unique,
really uses Oracles in
some composable manner
to generate interest
or a synthetic product
or something else.
And that's really the trend
that is starting to show the beginning of
how Smart Contracts and
Oracles being combined,
can create more advanced,
more composable kind of
combinations of Definitive Truth
into financial products
that are uniquely reliable,
and uniquely capable of
providing security guarantees,
transparency guarantees, and
various other guarantees.
I think the interesting way
to consider this is not only
how has DeFi evolved so far,
and how have tokens evolved so far,
but how will it continue to evolve?
And for this, I think we can turn to
some more traditional frameworks
around how our new technology is adopted.
One of the frameworks for
this that's quite useful,
is something called "Crossing the Chasm,"
it's a book about how
people cross the chasm
from early market technology adoption
by certain group of users, to
the mainstream market that,
that often has different conditions,
and I think this is really the start of
what we're starting to see now.
So I think what we're starting to see,
is the transition from
Blockchains are about tokens,
two, Blockchains are about
making financial products.
And that transition is
driven by many exciting
and innovative teams, that are,
many of which are at this conference.
It's also driven by
infrastructure like Ethereum,
and various other Blockchains,
that allow that Smart Contract
state to remain tamper-proof,
and to create a Definitive
Truth about that state.
As well as by the Oracles and the systems,
that create Definitive Truth
into those financial products,
'cause those financial products
are once again made up of two parts.
Now, I think the dynamic
here is going to be that
you continue to see more
value flow into DeFi,
and Crypto CeFi.
You then will see the fact
that DeFi and Crypto CeFi's
ability to provide superior yields,
in a low-interest rate environment
will be quite attractive
to even mainstream users.
That and the rate at which that evolves,
will determine to a certain degree,
the rate at which we cross this chasm.
There's no question that
DeFi and Crypto CeFi,
are more secure, and more transparent,
and that their counterparty
risk assumptions are better.
The unique thing that's been necessary
is part of their value proposition,
and I think we've now arrived
at a very strong value proposition,
both in the creation of immutable,
highly-reliable, new financial products,
in the form of something like synthetics
or other derivatives platforms,
and in the ability to generate interest
for the larger market.
Now I think that interest
for the larger market dynamic
is really one of the things
that's going to drive cryptocurrency,
to continue to be put into DeFi.
If you really look at
the percentage of crypto
that's in DeFi right now,
it's a really, really small percentage.
And you consistently see people,
even from the Bitcoin side of
the cryptocurrency landscape,
turning their Bitcoin into various,
wrapped versions of Bitcoin,
and bringing them into
DeFi to earn interest.
So I think we're really even
at the beginning of this trend,
where you go from the
innovators providing tokens,
to generating those,
to placing those tokens
in interest-bearing, and various
other financial products.
And so I think there's
a large amount of growth
in the transition of that
360 billion into DeFi.
The next logical question
is then how do we go
from the amount of cryptocurrency
that currently is included in
that pool that can use DeFi,
and how do we expand that pool
into the global landscape?
So how do we arrive at a place
where you move from cryptocurrency
is something that I own,
because I want exposure to cryptocurrency,
to cryptocurrency or crypto assets,
are something that I own as an institution
or as a person because the guarantees
of that asset, and the financial products
I can use through that
asset, are superior.
And I think one of the things that,
that I just wanna point
out is that we are very,
very early in the shift
of how much cryptocurrency
is going to go into DeFi, and
that is part of the reason,
it's so rapidly accelerating,
because I think people
are starting to realize
the superior nature of Smart Contract
based financial products.
And then people are also
starting to realize that
cryptocurrencies have various benefits,
compared to traditional
institutional systems.
And it's really the second part
that we also need to be mindful of,
so we need to drive additional features,
additional capabilities into DeFi,
to make it the best possible,
most secure version of financial products
out there in the world,
relying on Definitive Truth
from Blockchain systems,
and various Oracle systems together.
But then we also need to reason through
how do we enable the
world's global economy,
to shift its value into a
Smart Contract, based format.
Whether that's through crypto startups,
web companies or institutions
moving into providing
that value into these systems.
And I think what this slide
is really meant to illustrate
is that we're at the very,
very, very beginning of this,
because the amount of value
that is out there in systems,
that don't have a
fraction of the security,
transparency or various other guarantees,
that Smart Contract systems,
in all their different private
and public forms can provide is massive,
and there's long running
issues with those systems.
So I think this transition
is going to occur
on the basis of a few key dynamics.
There's one slow dynamic,
and there's one fast dynamic,
the slow dynamic is interest yield,
so right now we are in a very
low-interest rate environment,
it's not clear to people
how we're gonna achieve a
higher-interest rate environment,
than the traditional markets.
And people are worried about inflation
and various other concerns,
it's a very valid concerns,
it's very unfortunate
that the world economy
has gone in this direction,
but it has, and I think
that people's appetite
for both yield and combating inflation,
is going to become massive.
That is the first place
where you really see
DeFi financial products,
and their efficiency,
and transparency, and ability to include
various other collateral
quickly is unique.
And the ability to
really generate massive,
consistent yields, from
various diversified categories
of assets, is something that's
gonna be quite attractive
to the global financial markets.
And once they realize
that on top of that yield,
they get transparency and security,
and much more control, and
much less counterparty risk,
that's really gonna be the huge benefit,
'cause the second dynamic,
the dynamic that'll move
fast or could move fast,
is the dynamic around counterparty risk.
And I don't feel that counterparty risk
is sufficiently understood,
by either our engineering
community in our own space
or in even parts of the
financial community,
but definitely not in the consumer sector.
So, counterparty risk,
is a fundamental aspect
of making financial transactions happen.
It's basically the risk
that the counterparty
you're dealing with,
will not follow through
on their obligations.
And there are various
contractual provisions,
that people in financial markets
make to mitigate this risk,
and to minimize it.
In consumer transactions a
lot of those costs are hidden,
and then kind of enterprise
transactions they still exist,
but they're not always
discussed as counterparty risk.
Now, in the slow mode
you have yield in-demand,
and inflation combating things in-demand,
both yield, and combating inflation
is something that cryptocurrencies,
and DeFi high yield products,
even if they stabilize are
gonna be exceptionally good at,
so that's low case is very positive.
The case where things
can move very quickly,
is if the solvency or the reliability
of brand-based guarantees begins to erode.
Now, this is actually a very scary thing,
and it'll mean some scary
changes in the world,
but the reality is that if
the world that we're in now,
is based on some kind of
institution or firm or enterprise,
saying you should trust
my insurance company,
you should trust my financial institution,
you should trust me because I have a logo,
and that logo has been solvent
in successfully executing
contracts for 100 years.
If that begins to fail, like
Wirecard, like other examples,
where people begin to
look into the solvency
or to question the solvency,
and the reality is that a lot of solvency
is based on market dynamics,
and the market is still
in a very good place.
So if the market doesn't
go to a good place,
if it goes to a bad
place, and you have people
whose solvency is based on the
market being in a good place,
well then solvency becomes an issue,
and the brand-based guarantees
of trust my 100-year logo,
begins to erode very quickly
and possibly disappear.
And I think the fundamental question
that everybody should ask themselves,
when thinking about Blockchain systems,
in their core, core foundational value,
is if brand-based guarantees
are no longer acceptable,
where do we go?
What do we do as a society
that wants to conduct global trade,
global financial transactions,
and kind of interact on
this contractual basis,
when somebody's brand no longer assures me
that they're solvent, and
that I can rely on them,
and that I can do transactions with them?
If we get to a world
where that is a question
or a fundamental question
for many transactions,
then math-based contractual guarantees,
of which Blockchains
and Definitive Truth
based systems like DeFi,
are the absolute pinnacle,
those systems will
immediately become in demand.
You actually already see
this in various countries,
where unfortunately the local government
or local institutions
were not able to provide
certain guarantees about
reliability and solvency.
In various countries
where ATMs are locked up
like Greece a few years
ago or other countries,
you start to see wallet
registration numbers
on public Blockchains from IPs
in those geographies skyrocket,
300%, 600%, and that's what
you're continuing to see.
So the signal that people
value math-based guarantees
is definitely there.
The signal that people are worried
about brand-based guarantees,
is increasingly, increasingly
looming on the horizon,
because nobody can quite understand
exactly how the global financial system,
will go through this without a huge shock,
that will question a lot of the solvency,
and brand-based contractual
guarantees of various systems,
institutions, enterprises and so on.
And so I think that the slow
case is very compelling,
the fast case is kind of scary,
but it goes to the core understanding
of how Definitive Truth based systems,
give you a different
relationship with risk.
And risk isn't something
that people always care
about until they do.
And I think we're unfortunately
gonna be at a place
where people do care very much about risk,
and counterparty risk specifically.
The final thing is security,
and I think you're definitely
gonna want more security
in your systems, but you're
going to really be focused
on how do I generate a high-yield product,
that has low counterparty risk?
And if it's secure all the better
'cause I keep hearing about a
multitude of security issues.
So this is kind of my reasoning
for why Smart Contract adoption,
will continue crossing that
chasm in the slow case,
but also very possibly in a fast case.
This is something I think
we're already beginning to see,
there are certain institutions,
that are those web tech firms,
if you look Back at that slide,
you'll see that the early mainstream
is actually web technology firms,
because web technology firms
of all the enterprises,
and even digital banks are
the most well positioned
to truly assess this
counterparty risk guarantee.
And so you're already seeing
certain finance departments
have very forward-looking,
well-run Web 2.0,
kind of companies, once
they understand that
they're possibly gonna
be in a high-inflation,
low-interest rate environment,
where their counterparty risk
is one of their primary risks.
The firms that understand that,
even if they're run by really
competent financial people
pull the trigger and go ahead,
and make cryptocurrency their
fundamental hedging strategy.
And I don't think that all firms
across the world will do this,
but I think they will do
this in a large percentage,
and it's fundamentally based
on these assumptions about yield,
as well as these assumptions
about counterparty risk,
which are in my opinion,
in pretty much guaranteed
to play out at some speed,
the speed at which they play out
is kind of the question at this point.
In order to provide those guarantees,
that people like MicroStrategy
want to rely on in Bitcoin,
in the Bitcoin that they've now gotten,
maybe they wanna earn
interest on that Bitcoin,
and they wanna put it into a DeFi product,
we as a space, and as an
industry need to continue
to deliver that guarantee,
we need to continue to
deliver Definitive Truth.
We need to continue to deliver
highly-transparent,
cryptographically secure systems,
and we're thrilled to announce that,
today here at the conference that,
in service of that goal,
we're doing a few things at Chainlink.
So one of the things that we're doing,
is we've recently acquired
something called DECO,
DECO is unique method for using HTTPS/TLS,
on which the entire internet
securely operates now,
it's unique method for using HTTPS/TLS,
to transmit data to various web systems,
Blockchain systems,
and enterprise systems,
and I'll tell you about
that in a few minutes.
But it's a very exciting thing,
which basically extends with TLS,
that's running in all of
these global servers can do,
and it extends it to provide
a new level of data security,
when transmitting data and proof,
as well as a new level of
privacy around that data,
which will allow that data
to now mesh much better
with the public nature of
Blockchains, because the data
does not actually need
to go on the Blockchain.
The data can be confirmed in
a way that keeps it private,
but allows it to be effectively
used on the Blockchain.
We're also creating a
Full Research program,
over many years now we've been working
with exceptionally talented research team,
and due to our recent success,
we're very lucky to have
the resources and everything
we need to expand our
research team even further.
We've also not been super
public about our research,
and we haven't always
extended as much clarity
about all the ongoing
research we're doing,
but we're going to be changing that,
and making a full research program,
where we have a large research team,
that's gonna continue to grow,
that's gonna be very well funded,
and that we're gonna have
various research grants for,
and that's gonna be, it's gonna continue
to be composed of the best researchers
in the security research,
cryptography, and computer
science disciplines.
And in service of that goal,
we're very, very grateful
and thrilled, to be
working with Ari Juels,
who is joining Chainlink
Labs as its chief scientist.
Ari is really one of the people
that's had a very large
impact on me over the years,
and that we were very lucky
to have written down initial
Chainlink White Paper with.
Me and Steve were very, very lucky
to have put that together with Ari,
and I've had the pleasure
of working with him
for many years, on making
Chainlink better and better.
Now he is luckily working with us
in a more kind of involved
capacity as the chief scientist,
who is running the research program.
And DECO is one of the first
things that we are finalizing,
the kind of research
and productization of,
through the research program,
in addition to a number of other things,
such as Mixicles, Town Cryer,
and many other innovative
methods that we would,
that we'll be looking
forward to releasing soon.
Now to jump into DECO,
I think that the way to view DECO is that,
you have the whole internet
running on HTTPS servers
for secure data.
and the appearance of HTTPS and TLS,
really provided us with a way to expand
what the internet did.
Because before that you didn't
have encrypted transmission
of highly sensitive data.
And so you wouldn't be able to do
something like send
the credit card number,
but once HTTPS and TLS appeared,
you were able to send credit card numbers,
and amazingly enough that
gave rise to E-commerce,
so now that I can send
payment information,
I can have E-commerce.
So the consistent history of what happens
when you make data more
secure, and more private,
but still allow people to use it,
is that people then compose that data
into massive new industries,
massive new use cases like E-commerce.
And I feel myself that DECO
is a similar innovation,
DECO is an innovation that
allows all the world's data,
just like HTTPS allowed all
the world's credit cards
to be used on the internet,
DECO allows all the world's
data that's in HTTPS/TLS format,
which is pretty much
almost all secure data,
to be utilized by Blockchain systems,
with two key properties.
The first thing that it
can do is it can prove
that a piece of data came
from a specific TLS session,
at a specific time.
And the second thing that it can do,
is it can provide
confidentiality about the data,
while still proving that
the data is a certain way.
So this means we can now prove
that the data came from a specific source,
and we can prove that it came
from a specifically
timestamped-TLS session.
And we can do this in
a zero knowledge proof,
but also decentralized manner,
without exposing that data to
a large decentralized system,
which would compromise its privacy.
So you maintain the privacy of the data,
which allows it to be used,
but you provide the
guarantee that both the data
came from a specific source,
in a specifically timestamped-TLS session,
and you are able to prove that
the data is a certain way.
So you're able to prove that the data
is a certain number or a certain change
in the data occurred, without
actually revealing the data
to a more public system like a Blockchain.
Later today, Ari will be
describing this in more detail,
and this is just kind of
a short general overview.
Generally speaking, I also
like to look at use cases
when describing some of these systems,
so some of the use cases
that I'm quite excited about,
are things like market data.
So there's a multitude of different,
unique specialized market data,
that's considered premium and private.
And taking this data, and
moving it into a Blockchain
is sometimes difficult because the private
or the high cost of the
unique nature of it,
makes it something you
don't always wanna expose
in a more public chain.
And this also has to do
with higher frequency data,
and a number of other
premium data dynamics,
which we've been involved
with for half a decade now
in our kind of quest to make sure that,
not only do we deliver Definitive Truth,
but we deliver the highest
quality data about the world,
that's then made into Definitive Truth.
So I think one of the
things DECO will do is,
it'll enable us to properly generate,
well basically make accessible,
all the premium, private,
and unique market data,
that previously might not have
gone onto a public Blockchain
or even a consortium chain,
which is kind of a
semi-private environment,
where people still worry
about releasing data
that they wouldn't want
to be considered public.
So the ability for us to
now put the highest quality,
highest frequency, and unique datasets,
to generate even more unique,
high quality data products,
is being made more possible.
And this I think will
actually enable DeFi products
on scalable chains, in environments
where higher frequency,
premium various premium
data can function well.
It'll enable them to go to
feature parity and beyond,
with the financial
industries current systems,
because those systems can
consume premium private,
and unique market data,
and so we need to at
least reach feature parity
but also go beyond that.
The second use case,
that I think is going to
also have a big impact,
is the ability to confidentially
prove a collateral's solvency
status or capability,
So what you really wanna prove,
is that there's a piece of collateral,
it's in a certain state,
it's in a good state,
it's operating properly, but
the source of the collateral
might not wanna reveal that data,
so the source of collateral
might not wanna reveal their invoices,
they might not wanna reveal
the status of their real estate holdings,
they might not wanna reveal
the shipping of a certain good,
but you still want that collateral,
as part of the collateral
that goes into DeFi,
to make this highly-diversified,
high-yielding environment.
And so your question is now
how do I properly verify
that this collateral
is of a certain state,
while maintaining the
confidentiality requirements
of the collateral source?
And once you meet the
confidentiality requirements
of the collateral source,
once you say to them,
"Look, you can put your
collateral into these markets,
"and get paid for that collateral.
"But you don't have to reveal
"your critical kind of
institutional data in the process."
Once again the universe of data,
and therefore the universe
of things you can do,
the universe of collateral
greatly expands,
and we're already seeing this happen
in many of our meetings,
and this is something that
could accelerate the variety,
and amounts of collateral
that make their way,
onto various collateral
driven DeFi products.
The next example that I'm also fond of
is the ability to prove certain
AML/KYC and identity data,
without exposing that data
to a public Blockchain.
So there is an issue where
how do I provide proof
about myself, as some kind
of accredited investor
or a certain category of users,
that are allowed to use a product,
which is a requirement
that institutions may have
for taking DeFi products
and selling them themselves,
so you could actually, I
could actually see many banks,
and starting with digital banks,
taking DeFi products and
selling them to their users.
But in order to sell them to their users,
they would need to meet
certain requirements,
and those requirements would
often be around identity.
And these requirements are the things that
AML/KYC data is uniquely good at solving.
But the problem then is once again,
"Oh, I have this data,
I wanna keep it private,
"but I also wanna use it.
"I wanna keep it private and secure,
"but I wanna use it in a Blockchain
"cause that it's a really in demand sector
"for this data to be used."
And so once again, we can
deliver, an ability for that data
to maintain its privacy
and confidentiality,
because it never makes
its way onto a Blockchain,
and it actually only ever has to relive,
and reach a single DECO Chainlink node,
with the other DECO Chainlink nodes,
simply verifying the proof,
and therefore, they don't
actually need to receive the data.
You can now see a world
where identifiable data,
can be verified to the high
standards of a Blockchain,
to make sure that the
Definitive Truth of identity
is maintained throughout the process
of providing it to the Blockchain.
But the privacy and
confidentiality requirements
of that data are also maintained.
And once again, you see that the ability
to make data private or the
ability to keep data private,
and make it more secure,
enables its usage in many exciting ways.
One of the final ways that
I'm also very interested in
is the ability for single
source enterprise events.
So you do see a number of enterprises,
cautiously going into
taking their Blockchain PLCs
out of PLC mode, and into
pilot and maintenance stage.
And that's a very exciting thing,
because I think these are the kind of
early mainstream enterprises,
that see the value of Blockchains,
and have been researching them for years,
we're really lucky to
work with some of them,
and I think I do see that
they have a big future,
but they also have a slightly
different set of requirements.
And two of their requirements are,
I need to be able to connect to all my,
all the different Blockchains,
I'm kind of sick of trying to figure out
which Blockchain wins,
especially because I'm a multinational.
And the second requirement is
I have a lot of enterprise events,
and those enterprise events are private,
they're private to my system,
I want those enterprise events
to be proven to a contract,
I want them to trigger a contract,
and I'm glad for them to go through
some method of validation in the contract,
Smart Contract system,
but I am not comfortable
disclosing those details.
So enterprises have
multitudes of data about how,
multitudes of different
categories of data,
that they would use to
trigger their contracts,
and they want to use to
automate those contracts.
But once again, they're highly sensitive
about revealing that data,
and the security through which that data
would ever even be
transmitted to another system.
And so once again DECO,
can ensure that the data
is securely transmitted,
and that the data is properly validated,
from a single source, in
a decentralized manner
without exposing that data to a Blockchain
or even a huge amount of nodes,
because your knowledge proofs allow us to
have that data reach even
a single Chainlink node,
and be validated by the
other nodes in the network,
to meet the requirements of
the zero knowledge proof,
and then that proof to be
eventually kind of relied upon,
and in various ways
represented on a Blockchain.
I think the enterprise
use cases is meaningful,
it's in the medium term,
I think the immediate use
cases are definitely defined,
collateral and insurance.
But enterprise, I think is
not to be underestimated,
because it really relates to
where a lot of that value,
and that graphic sits right now,
and there will be some of
that value that shifts,
over to web companies that
implement crypto systems,
and even over to DeFi applications.
But I think there's still
a large amount of value
that will be in those systems,
and so the requirements
against which we're building,
need to enable people to
meet their requirements.
It's not about my requirements,
it's about our users requirements,
and the categories of users,
are once again from
that Crossing the Chasm,
Crossing the Chasm graph,
you have the DeFi users,
you have the Web 2.0, and early
adopter Fintech, Insurtechs,
then you have the enterprises.
One of the large questions
for the enterprises,
is how do I deal with
Blockchains generally?
Because enterprises don't wanna
choose a Blockchain winner,
they don't care about
choosing a Blockchain winner,
all they care about is
conducting transactions,
in their specific, vertical
industry in the environment,
that other people wanna
conduct transactions in.
And therefore, what you actually need
is you need a single kind
of abstraction layer,
that can fit into their
existing architecture,
and allow them to interact
with all these Blockchains.
And that's where all the time and energy,
and money that we're investing in,
properly integrating natively
with these many different chains,
that is going to create the interface,
through which various enterprise systems
can then interact with
those chains efficiently.
Which really just benefits everybody,
it benefits the enterprises
'cause they can efficiently
interact with the Blockchain sphere.
It benefits the platforms
they interact with,
because those platforms now get
access to all of their data,
and all of their kind of resources,
and all of the value that
they could put on chain.
And it obviously benefits Chainlink,
because it leads it to
become more of a standard,
a global standard for how
the enterprise landscape,
interacts with Blockchains
through an abstraction layer.
And so I think this is one thing
that's also not fully understood,
but you will need a
Blockchain abstraction layer,
for enterprises to make a single
kind of purchasing decision
about how they interact with Blockchains,
because Blockchains will not
only continue to interact
in their local market,
but these are multinational enterprises,
and they're not going to be able,
even if all the enterprises
decided to choose a winner,
there would be a huge crunch
in demand for engineers.
And you would need a
Blockchain abstraction layer,
that would cover all the
different geographies,
where there were even
geography specific winners.
So in the medium term, you're going to see
a need for a secure Blockchain,
middle-layer a secure
Blockchain abstraction layer
that enables those interactions.
And once again, I think
this is the meaningful way
to think about this, how
do we as an industry,
want to cross this chasm?
How do we wanna go from our industry
started with tokens, and it
generated a lot of tokens,
that brought a lot of
value into our industry,
that's great, that's a huge step forward,
and it's really what's
come to grow our industry
to where it is.
How do we then evolve into
these early adopter use cases,
in DeFi and crypto CeFi?
How do we expand those as fast as possible
with the best quality data?
How do we properly grow that securely,
so that it still represents
Definitive Truth?
When people use those systems,
they need to see Definitive Truth
on the Smart Contract state
level, on the data level,
and even on its interactions
with various other payment systems.
And so how do we maintain
that high standard,
of low counterparty risk
for the systems we build?
And then in what way do
we cross this chasm right?
What happens with the
interest rate environment,
and how people start to view DeFi,
and Blockchains, and cryptocurrencies,
as the method for
generating yield for them?
How do people continue to evaluate
the security benefits of Blockchains,
and also very importantly
how does the transparency,
transparency and immutable
nature of these systems,
generate a different dynamic
with counterparty risk?
And this final transition to a world
where people are cognizant
of their counterparty risk,
'cause they've probably experienced
an event, like Wirecard,
but much more frequently
and at much larger sizes,
to the point where counterparty risk,
has consistently become
a real consideration,
in how they evaluate the systems they use,
and the contracts they engage in.
And I think what we as an industry,
and we as a project at
Chainlink need to do is,
we really need to be ready to service
all of these stages of adoption.
We need to be able, we need
to enable DeFi's growth,
we need to enable the
transition of Crypto CeFi
into a more decentralized model.
We need to enable Web 2.0 tech firms,
fintechs and various other banks,
to efficiently transition to using
this decentralized infrastructure.
And then when the remaining
enterprises of the world,
come to a place where they say,
"This is the way,
"that I wanna conduct
financial transactions."
We need to give them an efficient,
well-made cryptographically secure, method
for interacting with this infrastructure,
while maintaining their privacy,
which they will absolutely
have to maintain,
and maintaining the high level
of data integrity and reliability.
So I think that's the overview
that we have time for today,
we'll be having more information,
and details about our research,
and all the work that we're doing here.
But also in the upcoming panel,
I'll be speaking with Ari,
and welcoming him once again to our team,
and to the larger Chainlink ecosystem
as our chief scientist.
And discussing some of
the interesting things
we're working on.
I'm looking forward to
seeing you at the panel,
and thank you again for
attending our conference.
And also thank you to
our amazing speakers,
who made the conference a
success, and to Rory and Adelyn,
and all the people in the marketing team,
that have been working day and night,
to make this an amazing conference.
Thank you very much,
and I'm looking forward
to speaking with all
of you soon thank you.
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