CCIP: Connecting The Dots Between Blockchain and The Real World | KBW2023

[Music] [Applause] great uh thank you very much hi everyone good to see you again um was back here a few years and I'm thrilled to see the blockchain industry growing so well in Korea very happy to see that um I think it's going to be useful for us to think about the historical context in which we're uh we're all doing our colle Ive work the way um the way I see our Collective work is that we are part of a very long tradition of creating the truth so Society um is heavily determined by how it defines the truth and what it considers to be true and the models and systems it uses to Define that this initially started with myths um and religion and that was the truth that powered most of society for a long time then once we became able to measure things to create measurement and prove things Beyond stories we were able to create science and have a scientific truth that we could all agree on and then scientific truth began to drive how Society made decisions and how it operated and where it went from there most recently we've gotten to a world uh with the help of the printing press and then the internet to a world where the printed word and uh what can be called digital truth is now driving a lot of how Society works but the printed word whether it's on a legal document or whether it's in the news or whether it's in your iPhone it's a very limited uh form of the truth because it can be manipulated and changed to suit the purposes of Whoever Whenever so I think that on the spectrum of the truth uh that can operate Society we're on the more advanced spectrum of what I consider to be computational and cryptographic Truth truth computational cryptographic truth is basically when computers determine what the truth is and then with the help of cryptography they Define that truth in a way that it cannot be changed so not is not only is the truth defined but the truth is permanent and cannot be modified to suit any one person's needs and so it becomes much more reliable the place where I think this takes Society is from a probabilistic world where people and institutions and Brands can make promises that they then decide not to keep there's a long history of big companies and institutions making promises but not keeping those promises um recent examples are things like Enron Leman Brothers more recent ones are Silicon Valley Bank and uh various others like silvergate and unfortunately because of the way the world is structured today I think we're going to see a multitude of more more Brands and institutions not keeping their promises the thing that we do in our industry and what we're all a part of in my opinion is creating these cryptographic guarantees and the cryptographic guarantees create What's called the deterministic outcome so it's something that will operate the same way every time so the promises that people uh experience in our industry even though they still have a long way to go they have the unique property that they can be deterministically guaranteed with math and cryptography so this is the body of work that I feel we we're all involved in together and we play a very specific role in creating this deterministic cryptographically guaranteed world we provide um the cryptographic truth that powers the vast majority of our industry so in putting over 10 billion data points on Chain by putting that data on chain that specific data was able to be used to generate something called fi which went on to redefine our industry Beyond tokenization so once you had one very narrow very specific category of cryptographic Truth appear on chain you could make advanced applications called defi applications and that industry grew from sub 100 million when we began to over 200 billion with the help of that cryptographic truth the transactional value that relies on cryptographic truth is also growing uh relative ly rapidly but it is also in sync with the speed and size of our market so so far over $8.5 trillion in transactional value has been enabled by the cryptographic truth and the cryptographically guaranteed computations of the chain link system so you both have a lot of Truth new type of cryptographic Truth and that new type of cryptographic Truth is powering a very large amount of value which in my opinion is set to grow my expectation is that the amount of value powered by cryptog graphic truth won't be 10 trillion it'll be hundreds of trillions we um began creating very specific type of data market data for defi but then we realized that actually there's many other types of topics and things that you need cryptographic truth on and then beyond cryptographic guaranteed truth you need compute so you need computation that can allow smart contracts to expand and use that cryptographic truth in more advanced ways and then once the applications create a more advanced use case you need them to access value and you need them to connect with value in other chains and these are the really key three determining factors of successful Advanced applications in our industry they have access to data that provides cryptographic truth they can provide um compute both onchain and offchain that is reliable and can't be manipulated and they can connect to all the chains easily so it doesn't matter what chain you're on you should be able to use any application on any other chain seamlessly without any concern just like you can use multiple systems and services on the internet without even knowing what system or Ser you know what what cloud they run on you don't know most of you probably don't know the cloud that your most used applications run on and that's because for the purposes of the value you get from the application you don't need to know you just need to use the but unfortunately um our industry has not always uh functioned this way so the the thing that's also important I think for all of us to understand is that smart contracts are made up of multiple Parts they're made up of an onchain part and an offchain part the offchain part is the part that we specialize in providing all the key inputs so the first problem we solved was the provision of secured data without secured data you won't have reliable smart cont contracts that do anything beyond tokenization and that even includes not even being able to make real world assets or other other things that require additional information to be useful after you provide the data you need the computation because the contracts themselves actually don't do a lot of the computation that they need to do and if either of these two things fail the whole system fails so you can't just get one of them right and then you have the need uh for cross-chain bridging to access the value and because the bridges control the value sent between these applications if the bridging system gets hacked or fails then the whole thing collapses once again and historically these things have failed because they're extremely centralized so there's like one person running a couple hundred Bridges from a key kept in their personal laptop or there's a single server providing data or there's a single automation server controlling the contract so these are are the failure modes of more advanced smart contracts that will go on to Define our industry and these are the failure modes that we are very far along in solving and some of which we're in the middle of solving and some of which we're now actively solving a production more more actively on the data side um the data transmission problem to reliably get data into blockchains is something we so far have been able to solve based on all the value transacted through data and based all the data points that went on chain right right now this splits into two main categories the first one is Market data uh Market data basically Powers defi no Market data no defy no defy no Next Generation blockchain stuff no Next Generation blockchain stuff what are we all doing here so we we really need the data to be reliable and create the Next Generation applications another example is proof of reserves so real world assets stable coins gold coins commodity coins real estate coins tokenized fund coins you know basically come up with a thing that someone wants put the word coin in front of it or after it probably both and it'll exist I'm sure um and the coins uh that that come to exist from this new wave of putting real world assets on chain they will also need to be proven to be real and so that's another increasingly important piece of data after these two categories which is the main categories where data is provided on chain right now you have identity data weather data other types of data which I think will get more and more adopted as different industries develop whether that's regulated defi or weather insurance but the the consumption of data depends on those applications needing to consume more data because those Industries are growing so great you have data that's wonderful that provides you a lot of new possibilities to make defi applications the next problem is how do you do computation in a way that is truly reliable so that even though the chain can do some computation the computation that you need to happen outside of the chain is also reliable because if the computation outside of the chain isn't reliable you're back to square one so you could have accurate reliable decentralized data but if someone controls the contract through the offchain computation it doesn't matter because they control the contract and that's it you're back to where you were where a single entity or a single person controls the whole system which is the opposite of a determinist cryptographically guaranteed world that that we previously defined so for computation the the first thing we released was a random number generator uh the random number generator is quite um advanced in terms of its ability to provide reliable um tamper proof numbers random numbers to for example games and nft generation events it's already being used by many top uh companies and Brands um NBA players have used it to generate their nft here in Korea recently Nexon started using it for their maple story Universe big Brands like Doin gabani use it to generate nfts but I I think what's important actually is the pattern right so the pattern is you have data that controls defi but random numbers are not data they're a computation and games are controlled by random numbers right because when you and me play a game someone has to win and something has to decide who wins do I win or do you win or when I open a chest for a for a reward do I get a good reward or a bad reward or when I give my money to an nft project and the nft project has to generate my nft did they generate a diamond nft or a golden nft or a silver like which which nft do I get so it's it's always the same pattern where the contract is controlled by something else and that's something else needs to reliably guarantee that the contract will not be manipulated other otherwise it's all pointless because you you can have the contract but if you can manipulate the thing that controls it there's really not much point to having it because it's once again being controlled in a way that eliminates that deterministic cryptographically guaranteed world the next category of computation was Automation and functions um Automation and functions is basically general purpose compute that's offchain that can power more and more advanced use cases so our goal on working in working on the chain link network is not just to provide data it's to provide all of the various inputs and all of the various computation and all of the various connection to value that advanced smart contracts need so Automation and functions they do things like liquidate positions they update smart contracts with time they trigger very critical functions which once again if you control those functions you control the contract and the whole point is that no one controls the cont contract and that's why the contract is cryptographically guaranteeing outcomes to you this is already being used by many top teams such as the maker ecosystem a synthetics and and many great others so great now you have data and you have compute and people someone cannot control the data and someone else cannot control the compute that's good but now you want to access other chains right because the other chains have a lot of value and if you don't access the other chains you lose access to a very big Market basically you choose one chain and you're in that chain and you're stuck and your Market is the market of that chain and that really doesn't make sense because that's not how the internet works right the internet doesn't work that you like you choose a cloud provider and then you're stuck in the people on that same cloud provider and that's it that's your Universe of people and applications you can interact with that's not not really how the world works right so so the way the world actually works is everything's connected on the Internet it's connected through tcpip which is a messaging and information transfer protocol that basically unified various different internet Technologies into the internet that we all use today and that's what ccip seeks to do so now you can have tamperproof reliable data you can have tamperproof decentralized reliable computation and now you can have tamper proof reliable connectivity to all chains so you can launch an application in one chain and that application can get money and connectivity and usage from everyone on every chain I can be on my favorite chain you can be on your favorite chain the bank a bank can be on their favorite chain and everyone can just use the same application that has reliable data and reliable compute and now reliable connectivity to users and value so where this will um lead us I think um is is a new world of of of possibilities and and this is what ccip does right so ccip uses the same security model the same um Oracle Network framework that has so far processed over 8.5 trillion dollar in transaction value that's put tens of uh well tens of billions billions billions at this point billions I'm sure at some point it be 10 tens of billions um billions of data points on chain to trigger um you know huge amounts of value to to move between applications and to function properly so that same security and security model is now being expanded to to to Bridges and that expansion to Bridges is quite important because um it's not a solved problem right bridges are not solved most bridges are centralized which means there's one or two servers there's one or two key holders and in those situations you're basically waiting for something like a multi-chain event event where one or two people have the keys and therefore the bridge you know is done and if the bridge is done and your application has value from the bridge or value in the bridge then your application's done um and by the way users don't care users don't care why something lost their money they and and by the way they they don't care but like we should care a lot we should care a lot because our industry is going to be based on our ability our industry's ability to provide reliable use of of systems that don't exist today right so if a user puts their value into an application that value should be triggered by reliable data it should be computed in a reliable way and and then when it moves somewhere else it should be safe and reliably accessible to them and the application if we don't meet that minimum standard then we will remain in a place where this will look like a toy to people or will look like a confused idea and so this is this is a necessity basically even aside from the fact fact that you go from a your application having to a market having a market of I don't know you know I don't know half a billion or a billion dollars in chain a to the entire blockchain industry's trillion dollars in value being able to use your application you know once the system is properly connected so the insight and the experience we have from making data networks automation networks and other other types of Oracle networks is now applied here um one of the key advantages of this frankly is the risk management Network where you can define various risk parameters that minimize the ability for funds to be lost and this is actually how every value transfer mechanism in the world Works where you can Define risk policies and those risk policies mitigate risk um and and it's a very important and and Powerful feature which up until this point has not existed but where where all of this leads us collectively and this is really what we're we're trying to do we're trying to collectively get our industry to a certain place right because once frankly once you you have as much market share as as the chain link system does you your goal is still to be the standard and to make the most secure reliable system but your other goal is to grow the entire industry because frankly while our industry at a trillion dollars is impressive I think it has um tens to hundreds of times more value that can flow into it from various places but but where I think all of this work Rel lead is an internet of contracts of Highly reliable interconnected applications on various chains that regardless of where they were launched have access to Reliable connectivity to the outside world have access to Reliable computation that can't be manipulated and have access to all the other contracts on all the other chains and all the other private keys on all the other chains for them to receive value and for them to provide their value to those other contracts and those other private key holders and this will create um this term internet of contracts have has come and gone and come again and back and forth but I think it's actually a good term because you're arriving at a place where everything is so connected where it's just one internet it's like one internet of contracts it's one place where regardless of what chain you go on you're in one place just like the internet and that's where I think we get to to some next level um usage and adoption and value being provided to users one of the key inputs into this is the banking system so banks have a lot of money is basically the reality of the situation they've been around for a while banks are where people put money banks are where people put value and they're going to continue to have huge amounts of value so frankly our industry needs to find a way to take the value in Banks and get that value into blockchains because there's hundreds of trillions of value rolling around in that place it's the place where for the past couple hundred years all the value has been aggregated and placed so what we're working on now in addition to connecting all the different defi protocols all the different public chains is how do banks connect between each other and how do banks then connect to public chains right now with ccip what we're seeing is that there are banks interconnecting with each other regionally so like US Banks doing transactions with US Banks European Banks doing transactions with European Banks and Asian banks with Asian Banks so it's a very Regional world right now what what we're working on is accelerating that so not only does the regional activity between Banks massively increase but the global activity between Banks massively increases and then that Global and Regional activity of value from Banks being on chains flows into the public blockchain world because fundamentally I think banks and the global um Financial system as as it exists today sees a lot of value in blockchains and digital assets there's just kind of a legal barrier between public chains and Banks and private chains but basically both groups of of people and both you know ecosystems are involved in the same thing they're making transactions and those transactions are basically about the same thing they're about financial products and so it's it's at least to me completely obvious that the banking world and the public blockchain World wants to connect they can't connect for two reasons there isn't legal Clarity how they connect and then the technical process of connecting doesn't exist so the legal Clarity I'm gonna have nothing to do with that that's someone else's problem I'm not going to get too involved in that I'm just going to work on technology and make sure that the technology properly fulfills the requirements of connectivity one body of work there is our ability to work with existing Bank standards um like the Swift protocol and messaging system to efficiently connect Banks to hundreds of chains so that they don't need to have the burden of integrating with hundreds of chains so the the the less friction there is for banks to transact with each other and the less friction there is for banks to transact with public chains for whatever like their client comes to them and says I want you to buy and hold an nft for me I want you to buy and hold um some kind of real world asset made on a public chain or people in defi say I want real world assets that act as good collateral from Banks I'll pay Banks a premium all of these things at least to me are relatively obvious next steps and how all of this will go because both of these groups um are kind of doing the same thing they just need to finally get connected and the ability to connect them efficiently so that the banks can interface with chains that allow them to interact with each other and then allow them to interact with public chains is really the Big Technical hurdle here and I think one of the main solutions to that is using existing standards that allow easy connectivity for banks and the more of them connect frankly the more value flows into our industry and the more we all benefit so so that's the the early stage that we're at with ccip ccip is being actively used by many of the top blockchain teams um a synthetics many others and they are seeing a lot of benefit from it and its ability to securely connect them to other defi applications and other chains so there's one world right there's the public chain Value World then there's the bank chain Value World where there's a trillions of dollars in value right we want our industry to grow past $1 trillion I know where we can find a couple hundred trillion dollars you know seems like a good idea to get it over here so the bank chain World um is cautious and legally driven but as that becomes clearer the fundamental value of chains and if they're already on chains will enable larger and larger amounts of transactional value to not only flow between Banks but into to public chains eventually I think we'll arrive to A single world like this where everything is completely connected and everyone can just make a choice about how they want to make their application work so you can have defi applications backed by real world assets from Banks and you can have Banks purchasing nfts from public blockchain projects because their clients want want them to buy them some nft and the world just becomes one large interconnected World effectively without a public private chain distinction without a bank Chain versus you know even defi distinction right there will just be certain applications that some people can use in some places and other applications where they can use those applications in other places just like the internet because at the end of the day everyone just wants to transact and everyone just wants to connect to create value for their users so the world we're trying to get to is this world where not only has the bank chain value connected with the public chain value but um the public chain value has massively grown and both of these worlds eventually just become one world like on the internet you don't know what technologies are used on the back end right you don't know what cloud is run you don't even know the ideas behind many of the startups or any of these things you just want an application that provides you value right so I I think we just need to get to a world where everything is hyperconnected all the data all the cross-chain activity between every place that has value in private key holders and all the computation that processes all that value both onchain and offchain is reliable so at the end of the day that's what we're doing um chain link has now evolved Beyond providing data to providing these three critical aspects of building an advanced application the data the compute and the value those are the three things you need once you have the data you can process things from The Real World once you have the compute you can process them in a reliable way that can't be manipulated and once you have access to Value you can provide the value of your application in exchange from the value somewhere else and so this is really what we see as driving the next stage of both Next Generation defi Next Generation blockchain gaming the first generation of decentralized insurance which I hope finally happens um the ne the the first generation of many supply chain and healthcare related things all of these rely on these three key pillars in addition to a blockchain reliable data reliable compute and reliable access to Value once these things are provided I think we're going to see a similar boom to defy but now it's going to be orders of magnitude more advanced because if before you only had data now you have all these other capabilities and you can combine them and there's a huge um kind of multiplicative effect from that and huge amount of permutations and new variations of advanced existing products so we're building all this for the developers and for the people building the decentralized future as a creator of dii gaming insurance and other onchain applications we're very eager to help you we have various programs to help like build and scale and others and we have a a very eager Community to help make sure that your application actually provides value and give you feedback on it and work on understanding how it can be better so if you're a developer or you're someone building um a defi or gaming application we're very eager to work with you very eager to build the future together that's what we've been doing for the past four or five years and frankly there's a lot more future to build and we're very excited to do it together with you so thank you very much good to see all of you again and looking forward to speaking with you during the conference thank [Music] you