On April 28, the "Vitality 2021-Blockchain Ecological Industry Cloud Summit" hosted by Odaily was successfully held. This Cloud Summit invites blockchain industry leaders, representatives of high-quality enterprises, leading guests in the mining industry, and top project parties to discuss industry changes, link technology applications, and explore a richer imagination in the encrypted world.

(Click the link to watch the exciting content:http://live.baidu.com/m/media/pclive/pchome/live.html?room_id=4383383743&source=h5pre）

Chainlink co-founder Sergey Nazarov attended the afternoon event and shared the theme. He reviewed how he entered the encryption market and why he chose the oracle track as his main direction. At the same time, Sergey summarized the current development status of DeFi, and predicted possible trend scenarios in the future.

He said that DeFi is the first batch of application scenarios to be realized, because it is closely related to people's economic life and has developed very maturely. In the first quarter of this year, the total lock-up volume of blockchain cryptocurrencies has reached 2 trillion U.S. dollars. After that, the total value of cryptocurrencies will continue to grow significantly, and the DeFi trend will continue to develop. Specifically, large companies with huge customer bases such as Robinhood, Paypal, and banks will continue to push DeFi applications into the mainstream market, encouraging more and more people to use DeFi. Today's DeFi protocols will iterate into a very stable and mature Products, loans, derivatives and other agreements will enter the mainstream application field.

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The following is the transcript of the conversation, organized by Odaily

Andy：Today we have Sergey Nazarov, co-founder of Chainlink, a decentralized oracle network. The white paper you just released covers a whole year of work, over a hundred pages in total, and was co-authored by Dr. Ari Juels, Sergey, and a dozen other researchers from the computer science field.

The white paper is titled "Chainlink 2.0: A Future Development Plan for a Decentralized Oracle Network". The white paper explains how the oracle network will establish a decentralized metallayer. Its off-chain computing function has strong scalability, confidentiality and security, and can improve the performance of smart contracts. Another new feature in addition to the price feed function.

It's very exciting stuff, and we're going to have a good chat today, so let's welcome Sergey.

Sergey：Hi Andy, nice to meet you and thanks for having me on the show.

Andy：At the beginning, let's talk about some background information. Why don't you introduce your personal background and how you came into contact with the blockchain in the first place. What do you think is the potential of smart contracts and what can you achieve in this space?

Sergey：There were several points that attracted me at first. I was very interested in digital currency from the beginning because I knew a thing or two about the digital currency industry.

I discovered that Bitcoin is not a company, but an unstoppable protocol. This protocol needs to run on a physical basis, which I know is unique by design. Then I started digging into digital currencies, and I learned about multi-signatures and other security mechanisms and logic behind Bitcoin, and I began to understand that these systems are secured by algorithms rather than brands.This is the biggest difference between applications and smart contracts on the blockchain and traditional applications. The latter is actually endorsed by the brand logo. We must believe in the reputation of the brand to conduct transactions. Brands also control our information and assets. Brands have the right to decide whether we can trade assets, or whether we can buy insurance. In short, the brand determines the trust model between users and them.

What I've seen from my past experience working with different agreements and businesses is that brands have more control over contracts and their outcomes than many realize. I've always found it odd that people think their relationship to brands, assets, insurance, and data isn't what they think it is. The legal framework does not give us enough information transparency, nor does it create accountability, or clearly define the relationship between users and brands or contracts.

So when I really understood what the blockchain can do, I started researching what else the blockchain can do. First we put message and communication data on-chain, followed by DEX transaction and ownership data, and I quickly came to a conclusion:The security that blockchain brings to communication data, ownership data, and ownership transaction data can also be applied to all other types of contracts.

I shared this realization with many people at the time,That is, smart contracts can become the main digital contracts, defining the relationship between people and people, people and institutions, and institutions and institutions. We can write all events into smart contract codes and provide proofs.

I think of smart contracts as having two parts: one that codes the conditions of the contract, and one that proves the outcome of the contract.

When I started to enter the field of smart contracts more than seven years ago, when tokens were still part of the system, I decided that tokens were just one of the use cases, and tokens and private key voting were just one of the many use cases of smart contracts. From the beginning, I thought that smart contracts, which is what we call hybrid smart contracts, consist of two parts: one part is to express the agreement in code and use the blockchain to achieve verifiable reliability; the other part is to establish a system , to prove that an event has occurred - that is to say, to establish a system to prove to the smart contract that the goods have been delivered, the price has changed or the advertisement has been placed, the goods have been sent, the transaction has been completed, which can cover various events.

I quickly found out that without being able to build a system to prove to on-chain smart contracts what happened, the use cases for smart contracts are limited to tokens and private key voting, which of course are pretty amazing use cases. Tokens have brought great value to the blockchain ecology, and private key voting has established a governance structure on top of this value, so these use cases have their value.

But when I first entered the blockchain field, I had the idea that smart contracts should be smart enough to prove that events have already happened, and I quickly discovered that we need oracle mechanisms. At first, it was a centralized oracle machine. After many years, we began to build a decentralized oracle machine. Finally, the oracle machine mechanism currently implemented by Chainlink provides a guarantee of decentralization.

Andy：Can you explain to us what you mean by the hybrid smart contract you just mentioned? How is its functionality superior to today's smart contracts? How will it disrupt the current smart contract industry?

Sergey：Ok, no problem. The hybrid smart contract is actually a concept that some colleagues in the blockchain industry and I originally conceived seven or eight years ago, that is, smart contracts can communicate with any system in the world and prove events that occur in the real world. After that, smart contracts are gradually considered as codes on blockchains or smart contract platforms such as Ethereum, so the definition of smart contracts becomes codes that run on blockchains.

Due to the characteristics of the blockchain itself, smart contracts are considered to be able to agree on the contract conditions and cannot know whether the conditions are met, unless the event is the creation and transfer of tokens on the chain, or private key signatures or voting. The hybrid smart contract mentioned in the Chainlink white paper defines the complete functions of the smart contract. The word "hybrid" in the hybrid smart contract means that the contract combines the smart contract code on the chain and the off-chain system. The off-chain system can ensure the normal operation of the code on the chain.

therefore,

therefore,The concept of a hybrid smart contract includes two parts: the on-chain code and the off-chain system. The off-chain system is controlled by the on-chain code. This is the complete concept of a hybrid smart contract.

Hybrid smart contracts are already starting to impact our industries, such as DeFi, decentralized insurance, and blockchain gaming.Blockchain games guarantee results to users. You can see the same pattern recurring in the DeFi, insurance, and gaming industries. But if you look closely at the architecture and logic behind it, you will find that these applications have two parts: one is On-chain code, which defines the terms of the contract; one is the collection of off-chain systems that trigger the contract, provide proofs to the contract, perform operations on behalf of the contract, and send proofs of operations back to the contract.

The DeFi industry needs to input market data, deliver contracts and pay loans. The game industry is usually a lottery application, which needs to use code to represent the terms of the lottery contract, then generate random numbers off the chain, and provide verifiable random numbers to the lottery contract, so that the lottery can determine the final winner.

The international trade industry needs to enter data on the location of goods as well as data on the status of goods in the supply chain system. The insurance industry needs to input weather data and perform complex calculations to verify these data.

Andy: Last topic, if this new trend started in DeFi, how can we expand it to other industries, engage the mainstream world, and achieve large-scale application?

Sergey：DeFi is the first batch of application scenarios to be realized, because it is closely related to people's economic life, and it has also developed very maturely. In addition, DeFi has also borrowed the east wind of the token economy. The vigorous development of the token economy has injected huge value into cryptocurrencies, and these values ​​have also flowed into the DeFi field.

In the first quarter of this year, the total lock-up volume of blockchain cryptocurrencies has reached 2 trillion U.S. dollars. I think this is a very remarkable development. After that, the total value of cryptocurrencies will continue to grow significantly, which shows that the DeFi industry still has potential Huge value has yet to be developed. In the final analysis, the value of DeFi comes from the value of blockchain tokens.

The total lock-up volume of $2 trillion is a strong premise foundation, injecting great potential into the DeFi system. With such a foundation, these encrypted assets, stable coins and tokens will bring DeFi closer to the public. Now the public can obtain the carrier of storing value through Paypal or other services, that is, certificates, such as stable coins or Ethereum, Bitcoin and other certificates. In the future, this trend will continue to develop,Big companies like Robinhood, Paypal, and banks have huge customer bases and will continue to push DeFi applications into the mainstream market, encouraging more and more people to use DeFi.

In the end, I think there will gradually be such a scenario, that is, today's DeFi protocol will iterate into a very stable and mature product, because the public participates in it and verifies it through open source. Various protocols such as lending and derivatives will enter the mainstream application field. Mainstream banks, customer groups, investment consultants, asset management companies, and financial applications on mobile phones will all adopt these DeFi protocols.

I predict the next development is that people will hold cryptocurrencies in order to use DeFi applications.People now hold cryptocurrencies primarily for investment purposes, they hold tokens like bitcoin or stablecoins because they see investment value in them. After that, people will see the attractiveness of DeFi itself, and people will use the tokens and cryptocurrencies in their hands to use these DeFi protocols.

Andy: What you said is very exciting. We are very much looking forward to the next development and the role Chainlink 2.0 and hybrid smart contracts will play in this process. Thank you very much to the Chainlink team.