Wen | Wendy
On December 5, 2020, the 2020 World Blockchain Conference Wuhan officially opened at the Wuhan International Convention and Exhibition Center. The conference was hosted by Babbitt and received strong support from Wuhan Municipal Government, Jianghan District Government, Wuhan Municipal Bureau of Economics and Information Technology, and China Academy of Information and Communications Technology.
In the afternoon helping digital economy and sharing data security-Blockchain Big Data Forum, Chainlink CEO Sergey Nazarov released a speech titled “Promoting DeFi Development with New Data and Mortgage Types”. Nazarov said that the current stage of smart contracts is still “tokenization”. Although it has injected great value into the industry, the influence of smart contracts in the future will not be limited to data feed, but include games, insurance, etc. Other verticals, including the industry, bring more reliable data.
Therefore, Nazarov believes that the next bright spot in this industry will be “event-driven contracts.”
The following is the full text of the speech compiled by Babbitt:
Hello everyone, today I want to talk to you about smart contracts and how smart contracts will become mainstream digital contracts in the future.
First, let’s take a look at what stage the smart contract industry is currently developing. At present, the main function of smart contracts is to create certificates and private key voting, such as voting in DAO or transferring certificates with private keys or voting directly with private keys. At present, the main thing our industry is doing is generalization, generating on-chain certificates for assets, and transferring them in the form of certificates, or voting with certificates or private keys. This is a good start, and it has injected great value into the blockchain ecology. These values will later flow into more advanced smart contracts.
And I now believe that the next bright spot in this industry will be “event-driven contracts.” You can choose to create a token, to generalize it, and inject great value into our industry. But if you study the traditional finance, international trade and insurance industries, you will find that the agreements in these industries revolve around “events.” It is necessary to prove that certain events occurred in reality, such as price fluctuations, or the delivery of goods in international trade, or certain insurance events, such as events related to weather data. This kind of smart contract with more advanced functions, we call it As a “universal connected smart contract”, it can now be implemented.
Because we can now connect smart contracts to off-chain events, we can promote smart contracts to break through the functions of tokenization and voting, and become the mainstream agreement model in international finance, international trade, insurance, advertising and other industries, providing these traditional industries with A new digital protocol that relies on reliable blockchain technology to transmit event proofs to the blockchain.
Decentralized financial products are the first application scenario. Decentralized financial products use tokens as collateral or assets, but in fact DeFi is a financial agreement based on price data, so they can make good use of the value flowing into the DeFi field.
Now due to the rise and innovation of tokenization, a lot of value has flowed into the DeFi field. The current trend is that these agreements do not need to create more tokens, but need to increase the value of existing tokens. This value model is similar to the traditional financial market, which is to generate income, launch financial derivatives and other traditional ones. Similar contract types in the financial industry.
Nowadays, the types of decentralized finance are becoming more and more abundant, focusing on the various tokens that have been created. The market has a great demand for such DeFi products, because it provides users with a wealth of financial products, which allows users to gain income in a trust-free way, and invests and manages in the form of tokens, which retains the functions of traditional financial products It also adds the advantages of smart contracts and the characteristics of trustlessness.
When we study these systems up close, we will find that they are composed of two equally important parts, one of which is a smart contract, which is used to define the content of financial products; the other part is to prove events in the real world, such as price fluctuations , Delivery of goods or insurance events, these data are transmitted through the oracle.
So what I want to say next is to better connect smart contracts with various off-chain data and events, so that we can see that more events and proofs can be transferred to the chain, and more types and rich functions can be created. Smart contract. And these rich smart contracts will interact in a new way, which will further promote the development of decentralized finance and other vertical industries. Smart contracts in these industries will increasingly become the mainstream agreement method.
DeFi product access price feed is the first application scenario, which is an area that Chainlink has been paying attention to recently. We transfer an unprecedented amount of data to the chain for use in financial smart contracts, which has also given birth to decentralized finance, because many DeFi teams have access to Chainlink’s reliable decentralized price feed.
Prove market events or price fluctuations and provide basic price data for financial products. Financial products or smart contracts must be connected to real market data in order to operate normally. And transmitting these data to the chain through the oracle is the focus of Chainlink’s work.
What we have seen is that every time we publish new data types, every time we publish new financial market data to the chain, new decentralized applications will appear to access these data. This is very impressive. Excited. Because the speed at which we release new data determines the speed at which decentralized financial products cover new markets, such as cryptocurrency markets and traditional markets, and cover these markets with trustless decentralized financial products. So this is the first application scenario we have seen.
If our oracle network can truly be decentralized and reliably provide more data and events, there will be more decentralized financial applications and innovative functions.
In addition, we also see several emerging vertical industries. In addition to price feed, we also transmit other types of data, such as Chainlink VRF to generate verifiable random numbers, or various sports game data. These data have improved the reliability of blockchain games in unprecedented ways, such as creating NFTs or predicting the results of the market and other functions.
This will play a role in two key levels. One is that it will improve the reliability of blockchain games, which will be more attractive to gamers, so it will promote the application of blockchain games and eventually form blockchain games. Second, it can create more assets in blockchain games, such as NFTs, and these NFTs actually have DeFi market value. Therefore, the DeFi field is not only driven by price feeds, but also the verifiable random numbers of Chainlink VRF and various sports game data to promote the development of blockchain games. Blockchain games will generate unique assets. These unique assets have DeFi market value. This connection is very interesting.
As we continue to cover more markets and data types, more DeFi products will be produced, and we can better feed the DeFi market. In addition, blockchain games will also create more and more assets, such as transmitting more sports game data for the prediction market, and using random numbers to create reliable and verifiable rare NFTs. These NFTs will eventually become DeFi assets.
A similar trend has also emerged in the insurance industry. For example, we provide data for weather insurance. This application is currently online and successfully running, which has spawned more and more premium-based assets. I think this model is very critical to the development of DeFi, which further enhances the diversification of DeFi.
DeFi is not just cryptocurrency assets, such as tokens generated on DeFi applications or blockchains, but also game assets, such as NFTs and various other digital goods. Now DeFi can connect premium funds under the chain, and premium can create its own unique token, not based on the value of the token, but based on the final result of insurance events in the real world, so the risks involved are very different .
So the trend we are seeing now is this: DeFi smart contracts can use cryptocurrencies with very high liquidity and availability, and games can also create completely different tokens and on-chain assets.
In addition, there is a very reliable asset that is verified through “decentralized insurance smart contracts”. This is a new type of smart contract, which forms a benign closed loop.
In each vertical industry, more data and events will be generated, and therefore more assets and value will be generated, and interaction between them will be realized. For example, DeFi will provide a market for games and insurance assets, so there will be a reserve certificate, which is a packaging bit The currency provides proof, or sometimes it is a stable currency, or even real estate, gold and other assets.
Therefore, the future trend is that more and more assets will appear to make the DeFi market more diversified, and the growth of the DeFi market will in turn drive the market demand of traditional offline industries such as games and insurance, which will further promote the diversified development of the DeFi ecosystem , And expand the market demand for these assets, such as digital goods in games, premiums, reserve certificates for various tokens and stable coins, real estate and gold assets, and other various assets.
Finally, there will be many data providers running Chainlink nodes on their own, providing various types of data, such as campaigns, weather, and other data. We can’t even predict what data everyone will develop. This is the beauty of innovation.
Our task is to provide everyone with all the data needed. I think people will mainly develop DeFi applications and inject value in these four areas. In addition, we will cover more types of data and work with various data providers to put data on the chain.
Data providers can run the Chainlink node by themselves, sign the data and transmit it to the blockchain, or sell the data to the Chainlink node network. This is easier and faster. They don’t need to change any infrastructure or running software, so The data provider has two options.
Finally, we will build a large and interconnected service network on the chain. For example, smart contracts can be integrated with other smart contracts or oracles to provide price feeds, weather data or reserve certificates. Combining these high-quality services will achieve true innovation. The service ecology of the company realizes interaction in an innovative way.
This is like the early development stage of the Internet. At that time, people combined various libraries and data interfaces for innovation, so smart contract protocols can be compared to libraries. Now it appears on the blockchain in the form of open source and template, and the oracle is like a data interface, providing various resources such as price data, weather data, and random numbers.
I think it is necessary to organically combine these two functions, that is, a very reliable data source and a very reliable smart contract on the chain. The combination of the two will quickly develop from quantitative change to qualitative change. It can not only guarantee the security attributes, but also make it easy for developers to use; it not only has the unique trustlessness of smart contracts, but also allows developers to quickly develop and iterate, while continuously expanding the asset ecosystem. Initially, it was token assets and game assets, and then expanded to insurance assets and assets proven through the off-chain world, so that more people can access these data and assets, and the protocol can successfully access these resources. At the same time, the security mechanism is simplified so that more developers can efficiently develop various application scenarios. This is the next stage of the smart contract industry’s goal.
I think this will expand the scale of the smart contract industry tenfold and make smart contracts a mainstream digital contract.
If you are interested in this and are willing to join us, we are very happy to cooperate with you. Our team members come from all over the world, and we adopt a remote working model that allows you to fully realize your potential. If you are interested in decentralized systems, encryption technology, encryption economy or even game theory. We will be happy to work with you to solve problems in these areas. If you are interested, we are happy to communicate with you. Looking forward to communicating with you next time.
Thank you very much, and I wish you all a pleasant day.
