Latest / CRYPTO 101 / Ep. 721 Chainlink State of the Union: How Chainlink Connects Data to Blockchain

Transcript

Ep. 721 Chainlink State of the Union: How Chainlink Connects Data to Blockchain · CRYPTO 101

0:08
[SPEAKER_00]: all right everyone welcome back to the crypto 101 podcast we hope everyone is having a good morning or evening because no matter where you're coming in from you're certainly in the right place here today this is going to be another great episode I know we always come in that's the thing he's like oh it's always a great episode but today especially it's going to be a familiar face it's going to be a name that a lot of you are familiar with
0:31
[SPEAKER_00]: because they're one of the leaders of the crypto space and we'll get into all of it in just a second but I want to give a warm welcome to Mr. Johan Ide.
0:39
[SPEAKER_00]: He is the chief business officer over at Shane Link.
0:42
[SPEAKER_00]: Johan, good to have you man excited to talk today.
0:45
[SPEAKER_01]: Hey, thank you for having me.
0:47
[SPEAKER_01]: I'm excited to be here.
0:49
[SPEAKER_00]: Yeah, absolutely.
0:50
[SPEAKER_00]: I mean, Chainlink is, again, a familiar name to a lot of people.
0:54
[SPEAKER_00]: Chainlink is one of the pillars of the crypto space.
0:57
[SPEAKER_00]: The main net launched back in 2019.
0:59
[SPEAKER_00]: You guys have facilitated over $29 trillion in transaction value.
1:05
[SPEAKER_00]: And Chainlink is the largest oracle provider in crypto with around 70% of market share.
1:11
[SPEAKER_00]: So when it comes to who is actually communicating
1:14
[SPEAKER_00]: and partnering and working with not only crypto-based companies and blockchain tech, but also the traditional financial side.
1:23
[SPEAKER_00]: I think you guys are this perfect middleman that gets to work with and talk and interact with both sides.
1:30
[SPEAKER_00]: And you guys are essentially like the bridge that connects the two as the lead oracle provider.
1:35
[SPEAKER_00]: So there's a lot of cool stuff that we can talk about, you know, some of the problems, some of the big future solutions, the good, the bad,
1:42
[SPEAKER_00]: And again, to the listeners out there, I think you're really going to like this because you get to see how both sides work and you get to see like what's happening behind the scenes here and really what's going on from a lot of the leaders in the industry.
1:54
[SPEAKER_00]: So buckle your seatbelts, get ready, those no pads.
1:57
[SPEAKER_00]: And you know, before we even dive in, just give us a high level overview of what chain link does.
2:03
[SPEAKER_00]: I know we mentioned this word oracle, and we talked about connecting the two, but for the people who just are not as familiar,
2:10
[SPEAKER_00]: just introduce chain link in and what your primary mission is.
2:15
[SPEAKER_01]: Sure, if you want to go back to what the idea of changing keys, let's go back to 2017.
2:21
[SPEAKER_01]: You probably remember, back in 2017 for the folks who are around, you had tons of white papers.
2:27
[SPEAKER_01]: You had tons of ideas, basically.
2:29
[SPEAKER_01]: So you had white papers, maybe hundreds of them, right?
2:32
[SPEAKER_01]: Every time you looked at the white paper, you came to the same conclusion.
2:36
[SPEAKER_01]: The idea is great.
2:37
[SPEAKER_01]: How do you actually bid it?
2:39
[SPEAKER_01]: And the thing you found every time is that all of these IDs need to do a connection to the real world.
2:47
[SPEAKER_01]: They need a data.
2:48
[SPEAKER_01]: They need to know what was happening in the real world outside of blockchains.
2:53
[SPEAKER_01]: Because of blockchain, as in other data, it's a societal database.
2:56
[SPEAKER_01]: You have nothing connected to it.
2:57
[SPEAKER_01]: It's like a 900.
2:59
[SPEAKER_01]: There isn't much you can build on the island, you need to connect it to data, right?
3:03
[SPEAKER_01]: So that was our first mission.
3:05
[SPEAKER_01]: It was basically how do I make blockchains go from a dream to some things that's actually useful to go from a white paper to an application?
3:15
[SPEAKER_01]: That's really what Shannon is about.
3:17
[SPEAKER_01]: It's about creating this connection that allows us to build use cases that are actually useful on-chain.
3:23
[SPEAKER_01]: So the very first iteration of this was with data fields.
3:28
[SPEAKER_01]: Back in the day, you had no GFI, basically.
3:32
[SPEAKER_01]: You had an idea of a financial place on chain, right?
3:36
[SPEAKER_01]: And this financial place every time we discussed it was, you know, let's say you want to create a money market, let's say you want to have a derivative exchange.
3:44
[SPEAKER_01]: You need to know the price of assets, you need to know what the price of eth, what the price of bitcoin, what the price of gold, of silver,
3:52
[SPEAKER_01]: and Eugene gets his price natively.
3:54
[SPEAKER_01]: That's what Shaining solved.
3:56
[SPEAKER_01]: We are the first ones to basically start putting data on Shain for people for applications to start building on top of it.
4:04
[SPEAKER_01]: And through this one, symbol concept, which we call price fits today, you had defy go from, you know, it was minuscule back in the day, 20 million, 30 million dollars in value, two billions overnight.
4:16
[SPEAKER_01]: So that's really what we do.
4:17
[SPEAKER_01]: If you want to think of us,
4:21
[SPEAKER_01]: get blockchain to go from an IG, dream, to reality, and we do this by connecting our very siloed databases, our very siloed blockchain words, to the data that's actually useful to build complex financial applications on top.
4:38
[SPEAKER_00]: So you guys connect data on and off-chain and allows a lot of all this external data to be able to put on and connect to blockchain technology.
4:47
[SPEAKER_00]: And I think you're right.
4:48
[SPEAKER_00]: If you look at where we've come from from 2017 to the current day, 2017 was kind of the starting moment where DeFi really began to blow up.
5:01
[SPEAKER_00]: And you had the first true, I would say, the first true DeFi run around 2017, 2018,
5:06
[SPEAKER_00]: Of course, you had a really big one that happened in the the classic deep by summer just several years after that.
5:12
[SPEAKER_00]: But it's continued to go up from there.
5:14
[SPEAKER_00]: You know, TVLs have remained quite high.
5:16
[SPEAKER_00]: There's new defy protocols.
5:18
[SPEAKER_00]: And overall, the span and kind of the creativity of of projects since then has continued to grow.
5:25
[SPEAKER_00]: You see new innovations and new stuff is constantly made possible.
5:30
[SPEAKER_00]: Because we have this kind of infrastructure.
5:33
[SPEAKER_00]: So.
5:34
[SPEAKER_00]: I would say it's again, it's very foundational in nature and that's one of the points I want to kind of make across here to the listeners is that this is a core part of crypto and you guys because you have about 70% of the market share you get to work with a lot of different customers and partners both on-chain and off-chain.
5:54
[SPEAKER_00]: Can you just share with us maybe a few of those notable customers or partners that you all work with and how you help them, you know, maybe specifically I'm sure it spans a little bit from company to company.
6:07
[SPEAKER_01]: Yeah, absolutely, look the way to look at us is we started with data and now we're doing way more because at the end of the day it's about creating a very data rich environment but that also means cross chain right so for instance when you discuss cross chain with us we're working with Coinbase today.
6:25
[SPEAKER_01]: So every single wrapped asset that they issue, is secured by the Chending CCIP protocol.
6:33
[SPEAKER_01]: We're working with WordLiberTIFI on their stablecoin.
6:37
[SPEAKER_01]: We're working with Maple Finance.
6:40
[SPEAKER_01]: We're working, I think, with over 200 different token issuers securing tens of billions, basically, through processing.
6:48
[SPEAKER_01]: on the data side, which is another connection point, right?
6:52
[SPEAKER_01]: Here we're working with basically every GFI protocol you can think of, you know, from AvA to Compound to Morpho to Camino.
7:02
[SPEAKER_01]: We have 70% of the market share overall, but many of the change people care the most about are fully fully powered by chaining data.
7:10
[SPEAKER_01]: 90% of Ethereum is on chaining data.
7:13
[SPEAKER_01]: I believe base is 98%.
7:16
[SPEAKER_01]: Our betroth is 90%.
7:19
[SPEAKER_01]: So on the G5 side, everyone is using us.
7:23
[SPEAKER_01]: On tokenized assets issuance, you find names like Amunji, which is the largest asset manager in Europe.
7:30
[SPEAKER_01]: They're using chaining data to price enough for their tokenized fund.
7:34
[SPEAKER_01]: They're issuing.
7:36
[SPEAKER_01]: We're working with UBS.
7:38
[SPEAKER_01]: We're working with...
7:41
[SPEAKER_01]: Well, we have a big collaboration run on things this week, actually.
7:44
[SPEAKER_01]: It's not an answer.
7:44
[SPEAKER_01]: So that's when I can't handle that.
7:46
[SPEAKER_01]: But you get the idea, right?
7:47
[SPEAKER_01]: So we're working about, and DTCC was actually one of the largest projects we had.
7:52
[SPEAKER_01]: So DTCC is the CDS for the U.S.
7:55
[SPEAKER_01]: They basically process every single security transaction happening in the U.S.
8:00
[SPEAKER_01]: When we're talking about volumes that this is making, it's not trillions, it's quadrillions.
8:06
[SPEAKER_01]: You can't even file them the amount here being transacted.
8:10
[SPEAKER_01]: So we're working with them on a project we call smart now, which is basically how can we create enough data on chain for every tokenized fund being issued, right?
8:22
[SPEAKER_01]: So you can see we have a very, very large variety of names.
8:26
[SPEAKER_01]: both in GFI and in Tritfine.
8:29
[SPEAKER_01]: I think that kind of leads to what you're discussing earlier about us bridging these two words because at the end of the day what Shannon is about is bridging all right we start with bridging blockchains to data that they need to create data reach applications now we bridge two words try to find GFI together
8:51
[SPEAKER_00]: Yeah, I want to talk a little bit more about that because you brought up a good point when you're talking about like tokenization and different parts of defy with traditional finance coming in, there's a lot of of opportunity that comes with that.
9:05
[SPEAKER_00]: We always see these big saying thrown around about, oh, this is a trillion dollar opportunity.
9:10
[SPEAKER_00]: This is a multi-chilling dollar opportunity.
9:12
[SPEAKER_00]: You get all these big phrases out there when it comes to chain links business operations,
9:17
[SPEAKER_00]: What are some of your top priorities at the moment?
9:21
[SPEAKER_00]: Is it tokenization?
9:22
[SPEAKER_00]: Is it more multi-chain stuff?
9:24
[SPEAKER_00]: Is it just data?
9:25
[SPEAKER_00]: Which is what you guys are obviously big on?
9:28
[SPEAKER_00]: What are some of your top business priorities at the moment?
9:31
[SPEAKER_01]: So we have multiple products, we have CCIP for a cross chain, we have data feeds for data, we have proof of reserve to ensure the backing of tokenized assets is actually there.
9:43
[SPEAKER_01]: So we can't over means tokenized assets, that's a really critical one.
9:47
[SPEAKER_01]: We have CR-RE, I want to go into all the products, I do invite the people listening in to go to our docs later on.
9:57
[SPEAKER_01]: Those products converge in one pretty simple business opportunity.
10:03
[SPEAKER_01]: How do we make the space as big as possible?
10:06
[SPEAKER_01]: The space is currently secured by chanting in its, you know, in a big part, throughout G5, for blockchain, throughout tokenized assets.
10:15
[SPEAKER_01]: So for us, we do want to ensure this space keeps getting bigger and bigger, right?
10:20
[SPEAKER_01]: The big opportunity we see today is that a lot of the tokenized assets being issued on chain are not actually getting distribution.
10:28
[SPEAKER_01]: They're not getting enough buyers on chain.
10:31
[SPEAKER_01]: They're not getting enough G5 adoption.
10:33
[SPEAKER_01]: If you look at why tokenized assets haven't really taken off yet, it's because the distribution just isn't there.
10:41
[SPEAKER_01]: You're not finding the critical buyers you need to find on chain.
10:45
[SPEAKER_01]: At one key part we're working on is how do we make these tokenized assets a more appealing product?
10:52
[SPEAKER_01]: through things like proof-of-reserve, through things that cross-chain, and how do we make it some things that can be listed as collateral on Z5 protocols, for instance?
11:01
[SPEAKER_01]: How do we end?
11:02
[SPEAKER_01]: Yeah, please go ahead.
11:03
[SPEAKER_00]: So when you say the distribution isn't there, is that basically like saying the demand isn't necessarily there yet, because people can just go through the traditional means instead of the tokenized means.
11:15
[SPEAKER_01]: Absolutely, right now I think for many of these tokenized assets, they're struggling with the big question.
11:20
[SPEAKER_01]: How do I make these tokenized assets easier to buy and have more utility on-chain than it has off-chain?
11:29
[SPEAKER_01]: And this question for the most part has not been solved yet.
11:32
[SPEAKER_01]: And that's one critical part we're helping to solve.
11:36
[SPEAKER_00]: It's a good point.
11:37
[SPEAKER_00]: And I think when it comes to tokenization, there's going to be different forms of it for different people, right?
11:45
[SPEAKER_00]: really good argument for it is giving people access to buy something that they might not be able to natively buy because of their country's rules and regulations, right?
11:54
[SPEAKER_00]: And when you look at like one of the great examples was just like publicly traded companies in the US, not everyone outside the US can get easy instant access to those.
12:03
[SPEAKER_00]: So a way that you can do that is through tokenization.
12:07
[SPEAKER_00]: For I would say that probably the average US customer, it gets a little bit more tricky because
12:14
[SPEAKER_00]: You know, there I say we're a little bit spoiled, right?
12:15
[SPEAKER_00]: We can get access to almost anything over here in one way or another, but there's a lot of different market share out there that's beyond us, right?
12:23
[SPEAKER_00]: There's a lot of people who probably want to get access to things and they can't.
12:26
[SPEAKER_00]: And that's a really big opportunity.
12:28
[SPEAKER_00]: And then there's also this argument of fractionalization, right, increasing liquidity by being able to fractionalize things that are lower liquid or higher price, and that's a whole
12:43
[SPEAKER_00]: So, I mean, there's a lot of ways to look at it, which I think, again, kind of goes to the addressable market here.
12:51
[SPEAKER_00]: It's not just like, it's not just like you're looking down in the aerodore way.
12:54
[SPEAKER_00]: No, I got it.
12:54
[SPEAKER_00]: This is the only use case.
12:56
[SPEAKER_00]: It does get pretty broad.
12:58
[SPEAKER_01]: Yeah, absolutely.
12:59
[SPEAKER_01]: I mean, look, there are two examples here.
13:01
[SPEAKER_01]: I'm going to discuss one is x-tox.
13:04
[SPEAKER_01]: So x-tox has gotten tons of adoption and a lot of this adoption, for instance, is in Asia because a lot of Asian investors want to get exposure to US-tox.
13:14
[SPEAKER_01]: Next up is one of our key partners and the concrete ways we've been able to help them right for instance is they're using CCIP, they're able to get zero token on every single chain using our cross chain, increasing the amount of buyers for zero token, I stuck.
13:30
[SPEAKER_01]: Because if I'm on more chains,
13:32
[SPEAKER_01]: then by definition, I get more buyers.
13:34
[SPEAKER_01]: I have more exposure for people to buy my set.
13:37
[SPEAKER_01]: The second two is thanks to changing data feeds, x-docs was able to go on many, many GeFi protocols, from Camino to Morphoi, etc.
13:46
[SPEAKER_01]: So now if I'm buying x-doc, I can buy it on any chain, and I can use it as collateral to borrow a stable coin to be able to buy more x-docs or be able to buy E if or do whatever I want, right?
14:02
[SPEAKER_01]: I don't know, Solana, to an asset you can hold on any single chain, and you can use a scooter road to be able to do more with this asset.
14:10
[SPEAKER_01]: And I think that's a killer use case.
14:13
[SPEAKER_01]: Second thing, to go to your points, one of the biggest adoption, we saw back in the day for stablecoins was Argentina.
14:23
[SPEAKER_01]: Turkey that's we're talking 2019 2020 so if you go way back the first adopters of die it was called die now it's called USGS those were all in Argentina why because there was hyperinflation in their country and they needed exposure to US dollars.
14:41
[SPEAKER_01]: So, absolutely, the tokenized asset adoption is always going to be conditioned based on different geographies, right?
14:51
[SPEAKER_01]: I think that's been a trend in our space and I think that's also the beauty of our space.
14:56
[SPEAKER_01]: The space will succeed in any case because we have the ability to take any asset on a global scale.
15:05
[SPEAKER_01]: And there is no other in-frying the word which can take an asset and make it global and accessible to every single person and democratize it in the way blockchain can today.
15:18
[SPEAKER_00]: So you're basically saying kind of to bring this point together.
15:22
[SPEAKER_00]: There needs to be some demand issues solved for incentivizing tokenization before there is this further adoption.
15:32
[SPEAKER_00]: And there's different ways we can go about it.
15:33
[SPEAKER_00]: But that seems to be what you're really focused on right now is saying, how can we incentivize tokenization to be used more frequently?
15:40
[SPEAKER_00]: How can we make it a better source of an asset to purchase as opposed to its traditional counterpart?
15:49
[SPEAKER_00]: Is there a way, I mean, does this link the liquidity so say you have a tokenized version of like the S&P 500 and then you have the actual S&P 500?
15:56
[SPEAKER_00]: Like does that unify and increase liquidity or does that fractionalize it because, you know, you're causing people to buy either the the
16:10
[SPEAKER_01]: There will be a transition period that, in the end of the day, nothing will happen if there is no net positive for these institutions, for the buyers, et cetera, right?
16:19
[SPEAKER_01]: The way of you, which is that all of these folks are exploring to conization, Nasdaq had an announcement, I think, a few weeks ago.
16:26
[SPEAKER_01]: So all of them are exploring it because there is a positive, right?
16:30
[SPEAKER_01]: This positive, I think, comes down to two things.
16:33
[SPEAKER_01]: One is efficiency, you have huge efficiency gains.
16:36
[SPEAKER_01]: The second one is bigger liquidity.
16:39
[SPEAKER_01]: The markets right now in the U.S. for instance were built for U.S. buyers.
16:45
[SPEAKER_01]: They were not built for a global audience.
16:47
[SPEAKER_01]: The good example is the market switching down on U.S. hours or on the weekend.
16:53
[SPEAKER_01]: You can see the benefit of crypto by just looking at something like hyperliquid.
16:57
[SPEAKER_01]: Where when you had the war in the Middle East,
17:01
[SPEAKER_01]: Where did the everyone go to try and hedge your own position?
17:06
[SPEAKER_01]: It wasn't the try to find markets.
17:08
[SPEAKER_01]: It was blockchain.
17:10
[SPEAKER_01]: It was the derivative exchanges on chain, like hyper liquid.
17:13
[SPEAKER_01]: So yeah, please go ahead.
17:15
[SPEAKER_00]: It was crazy because you're right.
17:17
[SPEAKER_00]: During that period, we talked about it on the podcast, and on some of our internal sources.
17:22
[SPEAKER_00]: It was crazy.
17:22
[SPEAKER_00]: I mean, you're right when the markets were closed or it was after hours or really during the weekends, you saw them obviously having a lot of crypto trading, but then they kind of opened the doors and said, well, people want to trade metals, so we'll allow you to trade metals.
17:36
[SPEAKER_00]: People want to trade oil, so we'll allow you to trade oil.
17:39
[SPEAKER_00]: People want to trade, you know, the indices.
17:41
[SPEAKER_00]: So that's their kind of latest endeavor saying, let's let people trade 24-7 of like the S&P 500 or different indices.
17:48
[SPEAKER_00]: And so that's what they've done.
17:50
[SPEAKER_00]: Let's allow people to get 24-7 access from anywhere to trade these assets as they won.
17:57
[SPEAKER_00]: And they've removed the barriers.
18:00
[SPEAKER_00]: And it was ridiculous, the numbers that they were pulling in.
18:04
[SPEAKER_00]: I mean, you're talking about billions and billions of dollars shattering their own records and exploding to be one of the most used crypto platforms, which is so fascinating because they're on their own chain.
18:20
[SPEAKER_00]: It's hard to drive traffic to your own chain if you're somewhat separated, right?
18:25
[SPEAKER_00]: If you're built on a theory of everyone knows how to use you, everyone has your wallet.
18:29
[SPEAKER_00]: They know the on and off ramps.
18:30
[SPEAKER_00]: It's easy, same thing with like Salana and et cetera.
18:33
[SPEAKER_00]: But they were able to do this with their own product and platform on their own chain.
18:37
[SPEAKER_00]: and they still were so successful because of how compelling the use case was, which is exactly what you're kind of feeding into.
18:44
[SPEAKER_00]: And I think that if we can kind of take that principle and apply it to different areas, again, making it more convenient for people to use something like that, then the market share or the activity naturally follows.
18:58
[SPEAKER_01]: Yeah, absolutely.
18:58
[SPEAKER_01]: I mean, I think what it represented was there is a lot of demand for tokenization.
19:04
[SPEAKER_01]: There is a ton of demand for being able to hold trades, will where that sets on chain.
19:09
[SPEAKER_01]: And the reason for that is a few of key things.
19:12
[SPEAKER_01]: One is its global, you increase your buyer base.
19:16
[SPEAKER_01]: by a hundredfold.
19:17
[SPEAKER_01]: Two is it's 24-7.
19:18
[SPEAKER_01]: Three is every asset is composable.
19:22
[SPEAKER_01]: Every asset plays by the same rules.
19:24
[SPEAKER_01]: It's way easier to create applications that can take in any assets and be able to compose them together just like we had in DFI.
19:32
[SPEAKER_01]: Right?
19:32
[SPEAKER_01]: So it creates huge amounts of efficiency.
19:34
[SPEAKER_01]: So basically going back to our point is all of that stuff we're discussing, the people
19:45
[SPEAKER_01]: And they're going towards this word of tokenizing everything on Shane, right?
19:51
[SPEAKER_01]: Our job is to make it as easy and as straightforward as possible.
19:54
[SPEAKER_01]: And I think this is the most worthwhile endeavor you can have right now.
19:58
[SPEAKER_01]: Because if you can actually succeed, you take this space from being a few billion dollars to being tens of millions, hundreds of trillions dollars.
20:06
[SPEAKER_01]: Like we're talking about some things that if it succeeds, the whole world gets on Shane.
20:10
[SPEAKER_01]: And it's not a dream, it's something we could do in the next few years.
20:14
[SPEAKER_00]: Well, yeah, if the whole tokenization argument in an idea is, uh,
20:19
[SPEAKER_00]: It's a really good one.
20:20
[SPEAKER_00]: And we talk about it a lot over here.
20:22
[SPEAKER_00]: I want to start steering this more towards talks about security, because I've seen you talk about this, as well, a lot of us know, a lot of our listeners were asking us, and they've probably seen the news in regards to what happened with Kelpedal, just a few weeks back.
20:40
[SPEAKER_00]: It was $292 million, I think.
20:43
[SPEAKER_00]: It was an exploit that went, you essentially
20:49
[SPEAKER_00]: took a bunch of money and it was this big ordeal.
20:54
[SPEAKER_00]: Can you talk to us about like what actually happen there?
20:58
[SPEAKER_00]: Because I think it triggered something like $13 billion in defy value pulling out over a 48 hour window and think people are just confused about like what happened and how this happened and why it happened and what it means moving forward.
21:13
[SPEAKER_01]: Yeah, absolutely.
21:15
[SPEAKER_01]: So this re-staking asset, so it's basically the calcium they were using a cross chain protocol called Liar Zero, the protocol had an exploit which created the whole situation where someone was able to steal money.
21:35
[SPEAKER_01]: put it into a way and take out a huge loan against it.
21:39
[SPEAKER_01]: So I've created all the issues we're seeing today on socials, etc.
21:44
[SPEAKER_01]: Now what strikes me in this issue is defy composability is a great weapon, it can also get back to you very quickly.
21:55
[SPEAKER_01]: That's what happened here, right where
21:56
[SPEAKER_01]: An exploit in an asset caused a big issue for the defy space that we know today, right?
22:03
[SPEAKER_01]: So every single part of our space is connected.
22:08
[SPEAKER_01]: If you have an issue with one, you have an issue with all the others, basically.
22:13
[SPEAKER_01]: So for any asset if the asset has a problem, all the defy protocols that integrate this asset are at risk.
22:19
[SPEAKER_01]: That's number one.
22:20
[SPEAKER_01]: So because of this,
22:22
[SPEAKER_01]: you really can't compromise on security in this space.
22:25
[SPEAKER_01]: Because every single vector of attack will be used, not to destroy the asset.
22:31
[SPEAKER_01]: but also to destroy the whole space that's built on top of the asset.
22:35
[SPEAKER_01]: Actually, you're really scary.
22:37
[SPEAKER_01]: The second thing that our space has is that once you have an issue like this one, you cannot go back in time.
22:43
[SPEAKER_01]: Blockions are immutable as we all know, right?
22:46
[SPEAKER_01]: So, anything that happens, you can't go back to there is no arbitration, things that allows you to take back the money from the hacker and you know, solve the whole things.
22:55
[SPEAKER_01]: That's unlike TritFi.
22:57
[SPEAKER_01]: In blockchain, any mistake will cost you very dearly.
23:01
[SPEAKER_01]: Now, because of these two reasons, Chinese has always looked at security first.
23:08
[SPEAKER_01]: What does this mean on our side?
23:10
[SPEAKER_01]: It basically means we don't do anything if it's not secure.
23:13
[SPEAKER_01]: It's very simple.
23:15
[SPEAKER_01]: And I think this principle, you really can't compromise on it if you're an infrastructure provider, like us.
23:22
[SPEAKER_01]: You can't move fast and break things as an infrastructure provider.
23:25
[SPEAKER_01]: Your motto needs to be, it's size or safe.
23:28
[SPEAKER_01]: Or you don't really sit.
23:29
[SPEAKER_01]: You don't do anything with it, okay?
23:32
[SPEAKER_01]: So,
23:33
[SPEAKER_01]: from our, for instance, on the cross chain side, we have 16 node operators, which are running the cross chain.
23:41
[SPEAKER_01]: So if you want to actually attack the network, you will need to hack each single one of these node operators.
23:48
[SPEAKER_01]: Here you just had to hack one single party in order to steal all the money, like it happened within the hack.
23:55
[SPEAKER_01]: Now, yeah, please go ahead and then I continue.
23:58
[SPEAKER_00]: You know, that kind of reminds me of like other similar issues, slightly different from this, but other similar ones where in the early days, projects, a lot of altcoins, would only have a few validators.
24:13
[SPEAKER_00]: And so when it requires, like you said, 16 or sometimes it's 100 or whatever, it may be that different validators out there.
24:20
[SPEAKER_00]: They'll have like a few validators.
24:22
[SPEAKER_00]: So people need to like take over like a few of them, like two, three,
24:26
[SPEAKER_00]: And all of a sudden, they get access to all this capital.
24:29
[SPEAKER_00]: And that's kind of like what this reminds me of.
24:31
[SPEAKER_00]: And it doesn't make it as much sense.
24:33
[SPEAKER_00]: Like the big one that comes to my mind is Ron and Aronan back in the day, right?
24:38
[SPEAKER_00]: I think they had like, what was it?
24:40
[SPEAKER_00]: Like, I think it was like less than 10 validators.
24:42
[SPEAKER_00]: I could be wrong, was either like 7 or 13 or something like that.
24:45
[SPEAKER_00]: And so these, this group came in and was like, oh, okay, all we need to do is take over a few of these.
24:49
[SPEAKER_00]: And we get access to the blockchain.
24:51
[SPEAKER_00]: And the, the Ronan,
24:53
[SPEAKER_00]: hack was like one of the most infamous ones out there, and that's kind of what this reminds me of as you're talking about it.
25:00
[SPEAKER_01]: Is there like a comparison?
25:02
[SPEAKER_00]: And you find it frustrating that similar ask, again different, but somewhat similar mistakes can still be made all these years later.
25:12
[SPEAKER_01]: Yes, that's completely accurate.
25:13
[SPEAKER_01]: Look, I'll tell you one thing.
25:15
[SPEAKER_01]: I've been on the front lines of the, you know, whole security stuff for years now.
25:20
[SPEAKER_01]: When I started in 2018, basically pushing, you know, working on price, visitor, etc.
25:27
[SPEAKER_01]: all the protocols I would speak to were extremely extremely worried about security.
25:34
[SPEAKER_01]: There would ask me questions, how many nodes, how many not operators, how are they running?
25:39
[SPEAKER_01]: The protocol had very, very good skepticism.
25:44
[SPEAKER_01]: and they're all extremely focused about security.
25:47
[SPEAKER_01]: In the recent years, I've seen less and less of that.
25:52
[SPEAKER_01]: Meaning, our space as a whole has embraced values that are much more around latency, how fast are you, how cheap are you, et cetera, rather than security.
26:04
[SPEAKER_01]: And you can look at that by just looking at the number of L1 chains,
26:09
[SPEAKER_01]: who've been rising money in the last few years, they never talk about decentralization, they never talk about security.
26:17
[SPEAKER_01]: They always talk about how fast am I and how cheap am I.
26:22
[SPEAKER_01]: Now, I do think we need to have a big wake-up code as a space and I hope this hack will serve as this purpose to start asking questions around security again.
26:34
[SPEAKER_01]: We asked this question in 2019, so just to go back to your points, back in 2019, we had a lot of Oracle hacks in the space.
26:40
[SPEAKER_01]: People weren't using things like shaming.
26:43
[SPEAKER_01]: They were running their own sense, whereas the record.
26:46
[SPEAKER_01]: And they kept getting hacked.
26:48
[SPEAKER_01]: And because of that, the whole space was extremely focused on security.
26:53
[SPEAKER_01]: I think this hack we just saw is going to probably place this role of re-focusing more people on security, which I think is a very, very healthy thing, given the things I've seen in the last few years, where most of the talks you're having with users now may many of them are all about how cheap are you, how fast are you, we've been
27:16
[SPEAKER_00]: Uh, at least I can speak for myself, I've been a critic of that mindset, meaning that it's frustrating because for years you're right, new projects would come out and be like, okay, well, what do you offer?
27:28
[SPEAKER_00]: And they'd say, well, we're faster and we're cheaper.
27:31
[SPEAKER_00]: All right, a couple days later, the next layer one, the next layer two comes out.
27:35
[SPEAKER_00]: We're faster, we're cheaper.
27:36
[SPEAKER_00]: And that was just the
27:43
[SPEAKER_00]: It got to a point where all of a sudden there was like hundreds of these different layer ones and layer two's and that was like the main point and you know we get pitched a lot of them over here and then they come to us and say hey we should come on the podcast because we're a little bit faster and we're a little bit cheaper than Ethereum or Solana or fill in the blank and my thought processes as at what point does that truly matter as much anymore right we get so fast we get so cheap there is minimal reward for going any further than that why not look at different areas.
28:11
[SPEAKER_00]: and solve issues over there and I think one of those areas obviously is security.
28:16
[SPEAKER_00]: So you do make a good point.
28:18
[SPEAKER_00]: And I think it also raises the, not like concern, but the thought, right?
28:24
[SPEAKER_00]: Immediately my brain is going, okay, well, we were talking about this with the crypto companies, but you guys a chain link have plugs to a lot of these big, different financial institutions, right?
28:33
[SPEAKER_00]: Banks, asset managers, the big names, and tradify, or traditional finance, as better I know as, like, what does it actually take for those institutions?
28:42
[SPEAKER_00]: to take crypto infrastructure seriously and feel secure, and it has that been a barrier in conversations that you've had, because they seem really bullish on it.
28:53
[SPEAKER_00]: But if there are these issues, you have to think that maybe there's a little bit of holding back because of stuff like this.
28:58
[SPEAKER_00]: Is there any truth to that?
29:01
[SPEAKER_01]: Look, the good thing is actually understand our space and they're hyper focused on security.
29:05
[SPEAKER_01]: So one of the key reasons why you're seeing channeling work with all of this traditional financial finance names from JP Morgan, DTCC, to Swift, is because they're focused on security.
29:16
[SPEAKER_01]: And you notice there is no other Oracle working with them.
29:20
[SPEAKER_01]: There is no other question provider working with them.
29:22
[SPEAKER_01]: Where's the only ones?
29:24
[SPEAKER_01]: And really one of the key reasons is the security aspect.
29:27
[SPEAKER_01]: We do have very large convos around security.
29:30
[SPEAKER_01]: they don't exist of light as you can imagine.
29:33
[SPEAKER_01]: We're ISO stock to compliant right now, which was a key requirement for many of them.
29:39
[SPEAKER_01]: So with traditional finance,
29:44
[SPEAKER_01]: it's not a blocker, it's a key key point which plays very well for us because we didn't wait for traditional finance to tell us you need to be secure for us to use you.
29:55
[SPEAKER_01]: We've been aiming to be secure since 2019 because we actually care about this space and we don't want
30:07
[SPEAKER_01]: Look, I didn't have the day just to finish its cheap fast topic, because that's been also a key point that's been, you know, how do I say it politely, pissing me off for the last few years.
30:19
[SPEAKER_01]: I didn't have the day AWS is probably cheaper and faster than anyone else, right?
30:25
[SPEAKER_01]: If you're in this space, you're not in it because you're cheaper and you're faster.
30:29
[SPEAKER_01]: That's a nice feature.
30:30
[SPEAKER_01]: It's not the whole thing.
30:32
[SPEAKER_01]: The whole thing is you can host billions of dollars, trillions of dollars, on your infrastructure security without being lost.
30:40
[SPEAKER_01]: That's what matters.
30:41
[SPEAKER_00]: it is important right there is important there's different it's hard right because you have to juggle all these different points you are trying to juggle you know speed and efficiency and you're trying to juggle reliability also security so I understand where people come from but I think that security is arguably one of the most important ones
31:00
[SPEAKER_00]: You know, luckily, maybe not luckily.
31:03
[SPEAKER_00]: I would say, you know, intentionally, Chamberlain has avoided a lot of this, right?
31:08
[SPEAKER_00]: Different projects out there.
31:09
[SPEAKER_00]: They've had downtime, where they've had major hacks or exploits or dramas or whatever.
31:14
[SPEAKER_00]: And what's been amazing to me, and I don't want this to sound too much like a glaze, but you know, I've followed you all for a long time.
31:22
[SPEAKER_00]: I'm sure many of the long-term listeners have, is that Chandler has been able to avoid
31:28
[SPEAKER_00]: Just about all of the drama, any major exploits or hacks or any of this stuff, and I think that that's been a contributing factor to how chain links been able to hold so much Oracle market share.
31:40
[SPEAKER_00]: When you look at different projects out there, even different genres, right?
31:43
[SPEAKER_00]: I would say the Oracle space is a genre within crypto.
31:47
[SPEAKER_00]: It is tough for any project in any genre to hold above 70% market share for an extended period of time.
31:54
[SPEAKER_00]: You look at D-PIN, you look at D-Fi, you look at overall activity, it used to be dominated with Bitcoin, then Ethereum, now you look at Solana and you look at overall activity.
32:03
[SPEAKER_00]: You look at Dex's, those juggle, you look at different layer twos, those have gone back and forth.
32:08
[SPEAKER_00]: The list goes on, even with the tokenization, there's
32:13
[SPEAKER_00]: balances with different subjects that are doing all these different things in privacy and yada yada but I think that that's been a testimony to say if you have good security, if you avoid the drama, if you do what you say they're going to do and you do a good job with it while avoiding those other negative catalysts you will
32:31
[SPEAKER_00]: gain market share and you will hold it and you will grow and you know that's been kind of the story of chainlink because you guys have been around now for and I mean it's pushing I think it almost at decades since the ICO I could be wrong about that but that's great.
32:47
[SPEAKER_00]: in the main net was 2019 and here you are.
32:51
[SPEAKER_00]: So again, yeah, security needs to be a focus.
32:55
[SPEAKER_00]: It seems as if that is definitely a growing concern and people are paying more attention to it.
33:01
[SPEAKER_00]: I think also the help or not the help, the talk of quantum is making people really look at security and say, okay.
33:09
[SPEAKER_00]: Maybe we do need to pay more attention to this, right?
33:10
[SPEAKER_00]: You're seeing different quantum communities come in and say, let's make crypto more quantum resistance.
33:15
[SPEAKER_00]: And that's a different kind of security right, because you're looking at quantum security versus some of these other threats that are out there.
33:21
[SPEAKER_00]: But again, I think the more talk that we have,
33:24
[SPEAKER_00]: About security and the more that we have on improving it the more serious It's going to be taken and we bring this stuff up not because we want a critique or we're solved to you Any of this it's because we want to see this space succeed and the best way possible, right?
33:39
[SPEAKER_00]: That's why we bring this up and You know, it's a critique that I get from people right?
33:45
[SPEAKER_00]: They see these things happen and it pushes them away.
33:47
[SPEAKER_00]: They say, yeah, I mean, oh, maybe I'll avoid this I don't like that this keeps happening and
33:53
[SPEAKER_00]: Again, yeah.
33:53
[SPEAKER_00]: Anyway, I don't want to sound like a broken record, but the more that we get rid of that, I think the better it is for the overall growth of crypto's hall.
34:02
[SPEAKER_01]: Yeah, I know absolutely agree.
34:03
[SPEAKER_01]: Look, I do think we're doing work of, you know, it's not a easy work to be pitching and talking about security jolzer time, right?
34:12
[SPEAKER_01]: Like, you will get folks telling you, oh, that's not nice to be preaching, gathering people's security, et cetera.
34:17
[SPEAKER_01]: There has been this trend in the last few years where, you know, as soon as you raise an issue with
34:23
[SPEAKER_01]: a project security, you're breaking a taboo, you're like not combayai anymore, that's not good, right?
34:30
[SPEAKER_01]: But at the end of the day, I do think it's a very, very healthy thing to do because if you're bringing security, it's because we care about this space and we don't want people to be losing their money.
34:40
[SPEAKER_01]: in the hacks that constantly happen because of security issues, right?
34:45
[SPEAKER_01]: So look from our side, I think one of the key drivers why we've been so successful is because our security and the reason why we've been so focused on security is because we do genuinely care about this space, right?
35:00
[SPEAKER_01]: We do really believe in the vision crypto brings of empowering people, all of us are to have financial access.
35:09
[SPEAKER_01]: in the same way, you know, someone, like my edgy scenario for a crypto is that in a few years, someone living in Southeast Asia, Africa, wherever they live, they get the same financial opportunity as someone living in the West today.
35:22
[SPEAKER_01]: And I think we've done a lot of that already, with DFI, with Stablecons, et cetera, right?
35:27
[SPEAKER_01]: So I think it's so fast that's really worth fighting for, frankly.
35:31
[SPEAKER_01]: And whenever I see people compromising on this fight,
35:36
[SPEAKER_01]: by offering infrastructures, it's not secure, for instance, it's it there.
35:42
[SPEAKER_01]: I do think it's a very, very unhealthy thing.
35:45
[SPEAKER_01]: I think it's taking us back further away from succeeding in the mission, the crypto asset, and it's a very worthwhile mission.
35:53
[SPEAKER_00]: Well, I want to talk about the future, right?
35:55
[SPEAKER_00]: We talked about, you know, what has happened, what is going on?
35:59
[SPEAKER_00]: And I'll tell you what, I mean, it gets me excited, right?
36:02
[SPEAKER_00]: We talked about some of the good, some of the bad, some of the ugly.
36:07
[SPEAKER_00]: everything that's happening.
36:08
[SPEAKER_00]: I want to look forward, right?
36:10
[SPEAKER_00]: Because there's a lot of things to be excited about.
36:12
[SPEAKER_00]: I think the future is extremely bright, and I think the best is still ahead of us.
36:17
[SPEAKER_00]: When it comes to the roadmap and what you all have in the pipeline, just talk to us about that.
36:22
[SPEAKER_00]: I've seen some big articles.
36:24
[SPEAKER_00]: We mentioned some of these things earlier, so maybe we circle back to them a little bit, but
36:28
[SPEAKER_00]: I saw that you all partnered to bring the U.S. stock market on Shane working with 24.5 equities.
36:35
[SPEAKER_00]: You guys have had the chain link end game coming up because it has partnerships with Swift and Euro Clear and different banking partners.
36:44
[SPEAKER_00]: Just walk us through like any and all of those in what chain link has on the future roadmap.
36:50
[SPEAKER_01]: Yeah, absolutely, so we have a lot going on.
36:54
[SPEAKER_01]: On the data side, as you said, so we're bringing US equities, we're working to bring APAC, also equities.
37:01
[SPEAKER_01]: We've been working on gold and silver.
37:03
[SPEAKER_01]: That's live already with GMX.
37:07
[SPEAKER_01]: So we have a lot going on this front on cross chain.
37:12
[SPEAKER_01]: We've been launching,
37:16
[SPEAKER_01]: Well, we have, let's say, new releases coming up, which are going to improve drastically how tokenized assets and how the Defi world can both interact together using CCIP cross change.
37:28
[SPEAKER_01]: So one of the things we're trying to solve is how can we get these two words to communicate through cross change specifically.
37:34
[SPEAKER_01]: And the new release will have here.
37:36
[SPEAKER_01]: We have a lot of exciting features.
37:38
[SPEAKER_01]: We're working on privacy features.
37:40
[SPEAKER_01]: That's a key thing.
37:42
[SPEAKER_01]: that the space still doesn't do very well.
37:45
[SPEAKER_01]: How do I have private transactions?
37:48
[SPEAKER_01]: How can I put data that's proprietary data on shame?
37:53
[SPEAKER_01]: So we're solving some of these issues.
37:55
[SPEAKER_01]: We have some projects regarding AI on how AI could use or occurs to prove the authenticity of some of the things being posted by AI.
38:04
[SPEAKER_01]: So for instance, how do I ensure that some of the post-ons or sort of media are not AI-slopped?
38:11
[SPEAKER_01]: So we have a lot of features coming up in the next few months.
38:16
[SPEAKER_01]: And I would say a lot of these features are going towards this one vision I highlighted before.
38:21
[SPEAKER_01]: How do we ensure we basically cross these two words of tokenized asset and the GFI?
38:29
[SPEAKER_00]: Feels like there has to be a lot of market share in the AI stuff.
38:32
[SPEAKER_00]: Like I just don't see that going anywhere.
38:33
[SPEAKER_00]: I see it being used more often.
38:35
[SPEAKER_00]: The more AI detection that you all can run.
38:39
[SPEAKER_01]: Yeah.
38:40
[SPEAKER_00]: I feel like there's gotta be a decent amount of demand coming towards
38:45
[SPEAKER_01]: So we're working on a lot of stuff, is that we're securing prediction markets today with things like polymarket today are pretty market, isn't it?
38:57
[SPEAKER_01]: There's a big of our partners, I didn't mention earlier.
39:01
[SPEAKER_01]: So they're using us for a quick to data, for instance.
39:04
[SPEAKER_01]: But we're working with many more prediction markets.
39:06
[SPEAKER_01]: And one thing we've been looking at is how can AI be used for prediction markets?
39:12
[SPEAKER_01]: to be able to answer any question.
39:13
[SPEAKER_01]: So let's say you have some random question.
39:16
[SPEAKER_01]: Question is the landscape going to where a suit at the NATO summit?
39:19
[SPEAKER_01]: That's so as, you know, year and a half ago, you could use AI workers to resolve that.
39:24
[SPEAKER_01]: Another thing we're releasing that could touch on AI is we're working with Lama risk on risk workers for Avie.
39:34
[SPEAKER_01]: Risk workers could be using AI to be able to adjust LTVs and collateral gaps, etc.
39:41
[SPEAKER_01]: And the third big one I mentioned is, I think our space has a lot of value we can bring to AI because today AI has a big consensus issue.
39:55
[SPEAKER_01]: What I mean by ZX is that a lot of AI is actually speed out wrong facts.
39:59
[SPEAKER_01]: They hallucinate and one of the big issues you have with AI is they never say no or I don't know AI for all intents and purposes today is basically a smart you ask it the question it will always give you an answer Yeah, one of the big issues with that is if you start choosing AI for key stuff you're going to get a lot of wrong answers, right?
40:19
[SPEAKER_01]: So what we're thinking of is how can we actually aggregate multiple AIs through our oracards
40:26
[SPEAKER_01]: With one single prompt, you basically as a prompt to multiple ARs, we get one answer, you aggregate your answers, and based on Z, you can start getting the right, like you can know when you actually know something or when you don't.
40:41
[SPEAKER_01]: This could help you solve things like AR simulations, for instance.
40:44
[SPEAKER_01]: So there is a lot of different vectors, as you can tell on AI.
40:49
[SPEAKER_00]: Yeah, you know, I totally agree, man.
40:50
[SPEAKER_00]: There's so many things going on, but we really appreciate the conversation, is there anything that we missed when it comes to the future of Chainling or anything else that you've been working on?
41:00
[SPEAKER_01]: I think we covered a lot to look.
41:06
[SPEAKER_01]: The main thing I would like your viewers to take from the center of view is,
41:12
[SPEAKER_01]: There have been a lot of talks lately around crypto, AI, what's the most exciting space, etc.
41:20
[SPEAKER_01]: I think crypto has extremely important properties for the future of the world.
41:28
[SPEAKER_01]: If we don't mess up it's a guaranteed crypto with win and every single asset will leave on chain.
41:35
[SPEAKER_01]: For this to happen, you need key things like security, which is a non-negotiable.
41:40
[SPEAKER_01]: That's why changing throughout all the years has been investing in security.
41:44
[SPEAKER_01]: So I don't recommend anyone who's looking to build something into this space or even who's interested in looking into space to always keep in mind what's the security of your system?
41:55
[SPEAKER_01]: How is your info working?
41:57
[SPEAKER_01]: How is it decentralized?
41:58
[SPEAKER_01]: How are not operators getting paid?
42:01
[SPEAKER_01]: That's the first thing you should pay attention to
42:06
[SPEAKER_01]: Odessa Rice comes down later.
42:08
[SPEAKER_00]: It does.
42:09
[SPEAKER_00]: Well, there's one thing I think the listener should take as well.
42:12
[SPEAKER_00]: It's that guy's.
42:13
[SPEAKER_00]: The future is exciting.
42:14
[SPEAKER_00]: It looks bright.
42:15
[SPEAKER_00]: We talked about all sorts of things.
42:17
[SPEAKER_00]: And if there's one takeaway, is that there's a lot of market share to be had out there.
42:22
[SPEAKER_00]: There is a lot of market share to be had.
42:25
[SPEAKER_00]: There's a lot of things to look forward to.
42:27
[SPEAKER_00]: The builders are still building the institutions, one of the part of it, they want to grow.
42:34
[SPEAKER_00]: There's a lot of stuff to look forward to.
42:36
[SPEAKER_00]: So the future looks bright.
42:38
[SPEAKER_00]: It's exciting, Yohan.
42:40
[SPEAKER_00]: It's been a pleasure to have you on here.
42:42
[SPEAKER_00]: We appreciate your time.
42:43
[SPEAKER_00]: For people out there who want to get more involved, maybe they want to work with Chainlink, maybe they just want to follow you all, where can they follow both yourself and Chainlink?
42:52
[SPEAKER_01]: We have our Twitter account at Channing, so I think you'll find a lot of resources, they're super useful, and it's good to see all the announcements and work we're doing on a weekly basis.
43:05
[SPEAKER_01]: And I'm also on Twitter, it's I, Johan, to find me, so yeah, that would be the best places I would say.
43:12
[SPEAKER_00]: Awesome.
43:13
[SPEAKER_00]: Well, once again, thank you for joining us.
43:15
[SPEAKER_00]: This has been another great episode of the Crypto 101 podcast everyone.
43:19
[SPEAKER_00]: And until next time, we'll see all of you at the same time, same place next week.
43:23
[SPEAKER_00]: Take care.