Chainlink's Strategic Position in Capital Markets in 2024 | Sergey Nazarov

Summary

The speaker discusses their experience visiting various financial centers and engaging with central banks, exchanges, and commercial banks to understand the requirements for successful transactions across different financial ecosystems. They highlight the universal challenges of data, connectivity, and compliance in transactions, which Chainlink has been addressing with its flexible system capable of handling various data types and creating cross-chain connectivity. The speaker emphasizes the growth of the web3, DeFi, and real-world asset markets, driven by high-quality data and connectivity provided by Chainlink. They also touch upon the technical fragmentation caused by each financial institution having its own chain, leading to liquidity fragmentation. The speaker outlines the need for a shared global standard for data transmission and value transmission between blockchains, which Chainlink is working to establish. They also discuss the importance of a unified golden record for assets, the development of payment solutions, and the integration of blockchain with existing financial infrastructure. The speaker concludes by expressing optimism about the transformative potential of blockchain technology for both developed and emerging markets.

Takeaways

• 🌐 **Global Financial Ecosystems**: The speaker has been engaging with financial centers worldwide, gaining insights into the universal requirements for transactions across different financial ecosystems.
• 🔗 **Connectivity and Compliance**: Transactions universally require data, connectivity, and compliance. Chainlink has been addressing these needs, particularly in the web3 and DeFi sectors.
• 🔄 **Cross-Chain Transactions**: There's a growing opportunity for transactions to occur across various financial centers and their respective chains, which Chainlink aims to facilitate.
• 📈 **Technical Problem Relevance**: Approximately 80% of the technical problems solved by Chainlink in the web3 and DeFi space are applicable to banks and their private chains.
• 💡 **Unified Golden Record**: The concept of a unified golden record is introduced as a smart contract that contains both ownership rights and data about the underlying asset, aiming to reduce information asymmetry.
• 🏦 **Banking and Asset Management**: Banks and asset managers are creating their own chains, which leads to technical and liquidity fragmentation. Chainlink's data connectivity solutions can help overcome these challenges.
• 📊 **Settlement and Payment**: Reliable and accurate settlement prices are crucial for transactions. After settlement, assets need to be transferred through a process called delivery versus payment, facilitated by cross-chain connections.
• 🆔 **Identity and Compliance**: Transactions require identity data to comply with AML, KYC, and travel rule requirements, which Chainlink can provide as part of its data services.
• 🌟 **Chainlink's Role**: Chainlink is positioned to enable transactions by generating real-world assets as unified golden records, connecting to various chains, and ensuring compliance with legal standards at scale.
• 📈 **Market Expansion**: There's an anticipated explosion in high-quality assets and payment solutions, with Chainlink aiming to support the infrastructure for these transactions to occur seamlessly.
• ⚖️ **Standardization**: The emergence of a shared global standard for data transmission and value transmission between blockchains is essential, and Chainlink is working towards establishing this standard.

Q & A

What are the common problems faced by financial ecosystems that Chainlink has been solving?

The common problems faced by financial ecosystems include the need for data, connectivity, and compliance in transactions. Chainlink has been addressing these issues by providing data connectivity solutions across chains and ensuring transactions are compliant with legal standards.

How does Chainlink's system enable transactions across different financial centers?

Chainlink's system enables transactions across different financial centers by offering data connectivity solutions that work with all kinds of data and create connectivity across various chains, allowing for seamless transactions in different financial ecosystems.

What is the concept of a 'Unified Golden Record' in the context of Chainlink?

A 'Unified Golden Record' refers to an on-chain data container in the form of a smart contract that holds both ownership rights and various pieces of data about the underlying asset. It serves as a single source of truth for an asset, providing real-time data and reducing information asymmetry.

How does Chainlink address the issue of technical fragmentation in the financial industry?

Chainlink addresses technical fragmentation by providing a shared global standard for data transmission and value transmission between blockchains. This allows different chains, including those operated by banks and asset managers, to interoperate and transact seamlessly.

What role does Chainlink play in the creation and management of real-world assets?

Chainlink plays a crucial role in the creation and management of real-world assets by enabling the generation of these assets as unified golden records with rich data injected into them. It also facilitates the connection of these assets to different chains, ensuring secure and reliable transactions that comply with legal requirements.

How does Chainlink contribute to the development of payment solutions in the blockchain world?

Chainlink contributes to the development of payment solutions by working with various participants, including stable coin providers, banks issuing tokenized cash deposits, and central banks developing digital currencies. It ensures these payment methods can interface with blockchains and be used for transactions in a compliant manner.

What is the significance of Chainlink's cross-chain connectivity for asset transactions?

Chainlink's cross-chain connectivity is significant as it allows assets to move across different chains while maintaining synchronization with critical data. This ensures that assets retain their unified golden record status, enabling reliable and compliant transactions across various blockchain networks.

How does Chainlink help in the integration of existing financial infrastructure with blockchain technology?

Chainlink helps in the integration of existing financial infrastructure with blockchain technology by providing a blockchain abstraction layer within its Cross-Chain Interoperability Protocol (CCIP). This layer allows off-chain systems to interface with multiple chains through a single standard, leveraging existing infrastructure and workflows.

What are the key components of the blockchain world that Chainlink is working to connect and standardize?

The key components that Chainlink is working to connect and standardize include high-quality assets, payment methods, data underpinning transactions, and the ability to comply with legal conditions. Chainlink aims to create a unified network where these components can interact seamlessly across different chains.

How does Chainlink's role in the blockchain industry compare to the role of protocols like SWIFT in traditional finance?

Chainlink's role in the blockchain industry is analogous to protocols like SWIFT in traditional finance. Just as SWIFT enabled standardized communication between banks, Chainlink aims to enable standardized data transmission and value transmission between blockchains, facilitating seamless transactions and interoperability.

What are the potential benefits of Chainlink's infrastructure for emerging markets?

For emerging markets, Chainlink's infrastructure can provide a leapfrogging opportunity by enabling people without access to traditional banking services to participate in the global marketplace. It allows for the creation and holding of value through stable coins, central bank digital currencies, or tokenized deposits, thus potentially transforming their economic lives.

What is the long-term vision for Chainlink's role in the global financial system?

The long-term vision for Chainlink is to become the global standard for data transmission and value transmission in the blockchain world, enabling seamless interoperability between different chains and traditional financial systems. This would facilitate a transition to a new format for all value existence, improving efficiency, reducing information asymmetry, and expanding access to financial services globally.

Outlines

00:00

🌐 Global Financial Ecosystems and Chainlink's Role

The speaker has spent time in major financial centers like Hong Kong, Singapore, Sydney, and London, engaging with central banks, exchanges, clearing and settlement systems, commercial banks, and asset management firms. They've identified universal problems in transactions, such as the need for data, connectivity, and compliance, which Chainlink has been addressing. The speaker emphasizes the importance of a shared infrastructure for transactions across different financial centers and the potential for Chainlink's data connectivity solutions to facilitate this. They also discuss the technical fragmentation caused by each institution having its own chain and the need for a global standard to enable seamless transactions.

05:00

📈 Unified Golden Record and Asset Management

The paragraph introduces the concept of a 'Unified Golden Record', an on-chain data container or smart contract that consolidates ownership rights and data about an underlying asset. This innovation aims to reduce information asymmetry and improve risk management by providing real-time data about assets. The speaker discusses the benefits of this system, including 24/7 markets, better collateral management, and the merging of the capital markets and web3 worlds under a single set of standards. They also touch on the importance of payment methods that comply with legal requirements and the ongoing development of stablecoins and central bank digital currencies.

10:03

💹 Payment Solutions and the Growth of Transactions

The speaker predicts an explosion in high-quality assets and payment solutions in both the web3 and banking sectors. They discuss how Chainlink can enable transactions by generating assets as unified golden records, connecting them to various chains, and ensuring compliance with legal standards. The paragraph also highlights Chainlink's achievements in enabling transaction value and the potential for the platform to become a robust set of tools for managing transactions from start to finish at scale.

15:04

🔄 Cross-Chain Connectivity and Secondary Markets

The speaker emphasizes the importance of cross-chain connectivity for moving assets and data between different blockchains. They discuss Chainlink's ability to keep assets synchronized with data as they move across chains, maintaining a unified golden record. The paragraph also addresses the challenge of integrating legacy financial infrastructure with blockchain technology and Chainlink's role in providing a blockchain abstraction layer that allows traditional systems to interface with multiple chains through a single standard.

20:06

🚀 Blockchain's Impact on Society and the Future of Transactions

The speaker outlines the transformative potential of blockchain technology for developed and emerging markets. They discuss how blockchain can improve the efficiency of financial systems, reduce information asymmetry, and enable fractional ownership of assets. For emerging markets, blockchain offers a way for individuals to participate in the global economy without relying on their local legal systems. The speaker expresses optimism for the future, envisioning Chainlink as a critical component in the transition to a blockchain-based format for all forms of value and transactions.

Keywords

💡Financial Centers

Financial Centers refer to major cities that are significant hubs for economic activity and trade, such as Hong Kong, Singapore, Sydney, and London. These centers are crucial for global finance and are where major banks, stock exchanges, and economic institutions are located. In the video, the speaker discusses visiting these centers to understand the requirements for transactions to work within different financial ecosystems.

💡Chainlink

Chainlink is a decentralized oracle network that provides real-world data to smart contracts on blockchain. It is highlighted in the video as a system that has been successfully solving problems related to data, connectivity, and compliance for years, particularly in the categories of web 3 and DeFi (Decentralized Finance). Chainlink's flexibility is emphasized in its ability to work with various types of data and chains, which is essential for the interoperability of financial systems.

💡Technical Fragmentation

Technical Fragmentation refers to the division of technology into separate, non-interoperable systems. In the context of the video, it describes the situation where each bank, asset management firm, or exchange has its own chain, leading to a fragmentation of liquidity and purchasing power. This fragmentation is a challenge that needs to be addressed for seamless transactions across different financial platforms.

💡Settlement Price

A Settlement Price is the agreed-upon price at which a transaction is completed. It is a critical component in financial transactions that need to be reliable, manipulation-resistant, and accurate. In the video, the speaker mentions that Chainlink provides settlement prices to both the web 3 and capital markets communities, which is essential for the completion of transactions.

💡Cross-Chain Connection

Cross-Chain Connection refers to the ability to facilitate transactions or transfer assets across different blockchain platforms. This is important for the movement of assets and payments between various chains. The video emphasizes the need for additional data, like identity data, to comply with legal requirements such as AML (Anti-Money Laundering), KYC (Know Your Customer), and travel rules during cross-chain transactions.

💡Unified Golden Record

A Unified Golden Record is an on-chain data container, typically a smart contract, that encompasses both ownership rights and various data points about the underlying asset. It is a new model that contrasts with traditional systems where value transfer and data about the asset are handled separately. The Unified Golden Record aims to reduce information asymmetry and improve understanding of the asset's status, which is vital for risk management and market integrity.

💡Data Transmission

Data Transmission is the process of sending information from one location to another, which is fundamental for transactions to occur. In the blockchain context, as discussed in the video, high-quality data transmission is provided by Chainlink to ensure that transactions can happen efficiently and reliably across different blockchains. This is crucial for the creation and management of assets and the execution of smart contracts.

💡Compliance

Compliance refers to the adherence to laws, regulations, and standards. In the video, it is discussed in the context of ensuring that transactions and asset transfers follow legal requirements, such as those related to identity verification and anti-money laundering. Compliance is a gating factor for the adoption of new financial technologies and is essential for the legitimacy and trustworthiness of financial systems.

💡Stablecoins

Stablecoins are a type of cryptocurrency designed to minimize volatility by pegging their value to a stable asset, often a fiat currency like the US dollar. They are mentioned in the video as a form of payment method that needs to be developed and adopted for transactions to occur seamlessly. Stablecoins are seen as a potential solution to facilitate payments in the blockchain world and are being considered by various entities, including central banks.

💡Central Bank Digital Currencies (CBDCs)

CBDCs are digital forms of central bank-issued money. They are distinguished from cryptocurrencies by being a liability of the central bank, similar to physical cash. In the video, CBDCs are discussed as a potential payment solution that could play a significant role in the future of transactions, especially as they offer stability and are considered by many entities, including central banks, as part of their digital transformation.

💡Internet of Contracts

The Internet of Contracts is a concept that refers to a network where smart contracts can interoperate and interact across different blockchain platforms. It is analogous to the Internet of Things (IoT), but for contracts. The video discusses the importance of creating a standard that allows for the seamless interaction of contracts across chains, which is where Chainlink's role in providing data and connectivity becomes crucial for the realization of this vision.

Highlights

The speaker has spent weeks in major financial centers like Hong Kong, Singapore, Sydney, and London, meeting with central banks, exchanges, clearing and settlement systems, top commercial banks, and asset management firms to understand the requirements for making transactions work across different financial ecosystems.

Transactions universally require data, connectivity, and compliance, which are the problems Chainlink has been solving successfully for years in the web3 and DeFi space.

Chainlink's flexible system can work with all kinds of data and create connectivity across different blockchains, which is crucial for transactions to occur in a shared infrastructure model.

The growth of the web3, DeFi, and real-world asset markets on public chains is being driven by high-quality data from Chainlink and its cross-chain connectivity solutions.

Technical problems that Chainlink solves for banks and their private chains are largely applicable to its existing solutions, indicating the potential for broader adoption.

The emergence of numerous private chains by banks, asset managers, and exchanges creates technical fragmentation and liquidity silos, which is a barrier to efficient transactions.

A shared global standard is needed for transactions to occur seamlessly across different chains, and Chainlink is positioning itself as that standard provider.

Chainlink has provided reliable settlement prices to the web3 community and is now extending this to the capital markets, which is a key requirement for transactions.

Cross-chain transactions require additional data like identity information to comply with AML, KYC, and travel rule requirements, which Chainlink can facilitate.

The traditional capital markets rely on layers of systems to generate transactions with certain properties like settlement prices, identity requirements, and connectivity to payment systems.

Chainlink aims to rebuild these properties in the blockchain world by providing data, connectivity, and compliance solutions for private chains used by banks and asset managers.

The unified golden record concept involves creating a single on-chain smart contract that represents ownership and contains critical data about the underlying asset in real-time.

This new model addresses information asymmetries and risks in financial markets by providing better collateral management, risk management, and transparency.

The web3 world is innovating by tokenizing assets for use as collateral in protocols, while the capital markets are repackaging trillions in value on a unified set of standards.

A robust payment method that complies with legal requirements is essential for transactions to occur, and various stablecoins and central bank digital currencies are vying to fill this role.

Chainlink is actively working with different payment solution providers to enable seamless, compliant transactions against high-quality assets.

The emergence of secondary markets for assets and payment methods across different chains is a key piece of the puzzle for the blockchain ecosystem to mature.

Chainlink's data connectivity solutions across chains are critical for generating, moving, and synchronizing assets with data as they interact with various payment methods.

The legacy financial infrastructure of banks, asset managers, exchanges, etc. needs to interface efficiently with blockchains, which Chainlink is helping to facilitate through its blockchain abstraction layer.

The transition of the world's value onto blockchain formats will be a once-in-a-lifetime opportunity similar to the shift from paper to digital with the internet.

Chainlink is well-positioned to enable this massive transition by providing the necessary data, identity, connectivity, and compliance solutions as the global standard in web3 and beyond.

The successful execution of this vision could lead to a more efficient, transparent, and accessible financial system in both developed and emerging markets.

Transcripts

so over the last few months and weeks uh

I've been spending approximately a week

in a financial center such as Hong Kong

Singapore Sydney London and others and

in the process of spending that week in

each of those Financial Centers I've

made sure to meet with the Central Bank

the country's exchange the country's

clearing and settlement system the top

four five or more commercial Banks and

some of the top buy side Asset

Management

firms these meetings have given me a

view

of what is required to make a

transaction work in these different

Financial ecosystems and also how a

transaction can work across these

Financial Centers which is where the

real opportunity is in my

opinion the things that I found is that

the problems are Universal in the fact

that transactions need data transactions

need connectivity and transactions need

to be compliant

it is actually these problems that chain

link has been successfully solving for

years it's just been in a slightly

different category of contracts such as

web 3 and defi with certain specific

pieces of data like price data but chain

link as a system is constructed in a way

that it's flexible enough to work with

all kinds of data and to create

connectivity across all kinds of chains

so right now the world we are really

inhabiting is a world where the web 3

Market the defi Market the real world

asset Market in the public chain world

is continuing to grow and continuing to

be more and more heavily driven by high

quality data from chain link high

quality connectivity across chains from

chain link ccip and highquality

computations like automation to make the

contracts work about 80% of those

technical problems are re applicable to

the technical problems of Banks and Bank

private chains now all of those groups I

mentioned before all of the banks all of

the asset managers The Exchange and in

some cases even the central banks will

all have their own chains in having

their own chains they create a kind of

technical

fragmentation this technical

fragmentation then creates a

fragmentation of liquidity such that

each Bank each asset management firm

each exchange having its own

infrastructure fragments the liquidity

the purchasing power of its user base

into that infrastructure but not into a

shared infastructure and transactions

can only happen in a shared

infrastructure model all of these chains

and all of these transactions need a set

of standards in order to happen so in

order for you and me to transact we need

a settlement price that we both agree is

a reliable manipulation resistant

accurate settlement price that's one of

the first things that chain link

provided to the web 3dy community and is

now actively providing to the capital

markets community beyond that once we

reach settlement we then need to

transfer assets your your chain would

have stable coins and say someone else's

chain would have the assets and you need

to do what's called delivery versus

payment you need to finalize the

transaction where the assets move to the

one chain and the payment moves to the

chain where the asset came from this

requires a cross-chain connection now to

even move those assets you need

additional data like identity data to

comply with basic AML kyc and travel

rule requirements so now there's

additional data that needs to make its

way into the

transaction the the real way to think

about the traditional Capital markets is

that it's layers upon layers of systems

that have resulted in generating a

transaction with certain properties

those properties is that the transaction

has a settlement price the transaction

meets identity requirements the

transaction is able to move across

certain rails the transaction is connect

to payment systems that can pay for it

to happen and that is what needs to get

rebuilt in the blockchain world but in

the blockchain world of of private

chains and Banks and asset managers it

is being rebuilt by everyone having

their own chain so as everyone has their

own

chain they rebuild parts of the

infrastructure for how the system works

and then there's other parts like the

ability to inject data the ability to

connect those contracts across chains

the ability to be compliant that needs

to be fulfilled by a shared global

standard and that shared global standard

is now becoming chain link chain links

data connectivity Solutions across

chains and once everybody is on a single

standard transactions can happen

seamlessly this is what protocols like

Swift and fix and others have done in

the traditional World those Protocols

are not able to interface with

blockchains and so the other big part of

what we're doing is we're allowing those

protocols to interface with blockchain

so their large user base can interface

with blockchains for any activity buying

selling generating assets moving assets

through the chain link

interface so that's the general overview

of of what's going on we're generating

an infrastructure that is a global

standard for data transmission and value

transmission between

blockchains and basically creating a set

standard under which transactions can

happen a set standard for how data can

allow a transaction can happen a set

standard with which data is injected

into the transaction to even form the

real world asset or allow it to comply

with certain legal conditions and how

that transaction can then interact with

a payment method now this world is

really split up into three key Parts the

first part is the asset part it's the

actual asset that's being transacted

this is often called real world assets

in web 3 it's called digital assets in

the banking world and sometimes it's

called both things in the asset

management world and the generation of

an asset for us is really the creation

of what we call a unified golden record

so unified golden record is a data

container it's an onchain data container

in the form of a smart contract that has

both the ownership rights and various

pieces of data about the underlying

asset in one data container so the way

the traditional system works today is

the value transfer method the ability to

transfer ownership from me to you is in

one system there's just a system of

value transfer that's all it does and

then there's a multitude of different

Data Systems that people are responsible

to go to and get the data they need

about the underlying asset that they now

have ownership over that is the old

model in the new unified golden record

model what you really have is a single

onchain data container smart contract

that is both the representation of the

ownership and the place where you feed

critical data about the asset so for

example if it's a tokenized carbon

credit is the carbon credit valid and

redeemable or has it been redeemed and

therefore invalid if it's tokenized real

estate does the real estate have any

additional debt that's appeared against

that asset if it's money market funds

what is the nav calculation what is the

valuation of the fund if it's any other

asset what is the data that can prove

the status of the the underlying thing

the underlying asset in a real-time

basis and this is actually one of the

basic fundamental problems of the

financial markets is people have assets

that they don't understand and they're

not able or not informed enough or not

connected enough to data to understand

what's going on with the underlying

asset and this creates these big

information asymmetries which lead to

things like the 2008 financial crisis so

in the asset world you're getting a lot

of huge benefits like 247 365

markets better collateral management

which is a very valuable thing for banks

because if you get to move something

quicker and it's worth a100 billion do

you can earn interest on it for that

additional three days when you moved it

so that's very valuable and you get this

better risk management solution in the

form of a unified golden record an

onchain

record that's slightly different than

what the rwa world is doing in web 3 in

web 3 it's tokenizing a bunch of assets

that will be valuable collateral for

protocols and for users that want to own

it in a tokenized form and eventually

the capital markets world and the web 3

world will have to merge into a single

world and in order to do that they will

need to be on a single set of Standards

data standards connectivity standards

and computational

standards so on the asset side web3

world is kind of innovating and in in in

assets at the edges and the capital

markets are repackaging the hundreds of

trillions of dollars in value that they

already

secure now the second component of all

this is the payments side you need a

payments method in order to transact and

that payment method in the banking

sector has to comply with certain legal

requirements that compliance with legal

requirements is basically the gating

issue to whether or not that payments

method will or will not be used and if

there's no payments methods that meet

those legal requirements then there is

no payments method this is the big thing

that's shaking out right now there's VAR

stable coin providers that want to

become that payments method there's

various Banks making their own stable

coins there's central banks trying to

generate Central Bank digital currencies

to fulfill this role of a payment

solution against these assets right

because even if you have an asset if you

have no stable riskless form of payment

then transactions generally won't happen

because people generally don't prefer to

do asset to asset transactions they

prefer to do here's the value of the

asset that value is written into the

smart contract I know what it is second

by second I don't have to wait a week or

a month to Value it

and now I can purchase it with a stable

ideally riskless form of payment that

isn't exposed to various counterparty

risks technical risks and other risks

including legal as a risk that world is

now in the process of developing and

chain link is very actively working with

the various participants there stable

coins tokenized cash deposits from Banks

private bank money Central Bank digital

currencies all those Payment Solutions

are basically fitting into a model where

the central Bank digital currency stable

coin or other payment method is seen as

an opportunity by all those groups and a

necessity by the people who have assets

and some of them are making assets like

Banks some are making assets and stable

coins to just try to close the loop on

that problem I feel this is the year

where there is an explosion in high

quality assets both in the web 3 world

and in the banking world and there is

also a significant increase in the

amount and quality of Payment Solutions

that can be used to transact against

those assets which means the amount of

transactions and transactional flows is

rapidly increasing this year the

question from the point of view of chain

link in my opinion is how does chain

link enable those transactions how does

it enable the generation of those assets

how does it enable the movement of those

stable coins in a compliant way how does

it connect chains to allow the

transactions of assets for any number of

forms of payment and how does it do it

in Mass at scale with those same

commercial Banks and possibly even with

with asset issuers

themselves that basically boils down to

making a platform a robust set of

features and tools that can be used to

create and manage multiple steps in that

transaction and that is really I think

the the metric against which chain link

needs needs to look that over 10.5

trillion in transaction value enabled so

far is a really big achievement and one

of the biggest amounts of transaction

value enabled in in the entire

blockchain industry but I I think the

next stages enabling the transaction to

happen basically from beginning to end

so chain link will enable the generation

of a real world asset as a unified

golden record with a lot of data

injected into it to make it a better

asset then it will allow that asset to

be connected to all the different chains

public Andor private that have the

liquidity that have the purchasing power

to interact with that asset in a secure

and reliable way then it will inject

even more data into that asset to allow

it to be transferred in a way that

complies with various legal conditions

so that Banks asset managers and others

can actually purchase the asset and can

actually send payment for it and then

after that asset moves onto those other

chains it will need to stay synchronized

with data and then staying synchronized

with data it will retain the property of

being a unified golden record which is

once again the key property that we're

generating here by merging the dynamic

of data and value into a single system

such that you don't don't need to go get

data you don't need to figure out a ton

of data if the unified golden record if

the real world asset is properly

constructed because the key aspects of

the assets Health Quality risk are all

in the ownership receipt that you

possess and that anyone else who wants

to buy can look at and read so that's

the world that we're in the process of

building we're in process of building

the world where real world assets are

generated as reliable unified golden

records there's a reliable cross-chain

connection between hundreds of different

chains where liquidity is Unified into a

single Network you have various forms of

payment everything from privately issued

stable coins to privately issued bank

money to tokenized cash the Central Bank

digital currencies all those forms of

payment are also on that Network and the

value that the assets and the payments

can flow across that Network in a way

that complies with the legal

requirements of all the counterparties

but then there will be huge amounts of

value hundreds of trillions of dollars

in value in the banking sector in the

asset management sector that will only

interact with things once it meets those

legal requirements there has to be a

system that allows them to do

that once you have a network of

interconnected chains with high quality

assets with high quality payment methods

with high quality data under pining all

of those interactions in a way that's

highly reliable and allows people to

comply and do transactions in the way

that they have to I think our entire

industry reaches a whole new

level the final piece of the puzzle is

really the emergence of secondary

markets where all of those assets and

all of those payments me payment methods

eventually find secondary markets some

of those secondary markets will be

onchain some of them will be offchain

some of them will be onchain in web 3

some of them will be onchain in the bank

chains the important thing is that all

of those secondary markets on all those

various chains can also interact with

each other over a secure cross-chain

connection that is able to move both

data and value and this is one of the

key points that I think chain link uh

significantly excels at is there are

systems that can provide data and there

are systems that can do cross chain from

what I can tell right now there are no

systems that can allow you to generate

an asset with the necessary data on the

first chain and to generate it in a way

that as the asset moves to other chains

it will continue to receive the critical

data on a synchronized basis right so as

it goes to the second chain or the third

chain or the fourth chain or the fifth

chain keeping the asset in sync with the

data is actually one of the key

components of making this work across

the multitude of chains while still

having a unified golden

record and in addition to all that in

addition to the ability to provide data

to the asset to generate it the ability

to provide more data for to flow in a

way that complies with various legal

conditions the ability to to have it

move across at chains against various

payment methods and the ability for it

to stay synchronized with data as it

goes from chain A to B to C to D to e

you also have a very big kind of

traditional Legacy existing

infrastructure problem that is not going

to go away and this is where I work with

Swift and other key

foundational financial industry

protocols is very important because

Banks asset managers exchanges csds

central banks all these groups are not

going to replace their existing

infrastructure what they're going to try

to do and what they're already in the

process of doing with us in some cases

is layering blockchain infrastructure on

top of their existing infrastructure in

a way that it can interface

efficiently so their basic calculus is

how do I efficiently use my existing

signing key solution my existing

database my existing infrastructure my

existing workflows with blockchains as a

transactional mechanism whether it's on

the asset side or on the payment side

and this challenge uh being solved will

rapidly accelerate the adoption by

thousands of banks because the

alternative for them is to natively

integrate into hundreds of chains learn

hundreds of chains that are not stable

that constantly change that ship

breaking changes which is something I

don't think they'll just even be able to

do and they also realize this so the

other thing that's being provided by us

in these meetings and these

conversations and some of these ongoing

implementations is the blockchain

abstraction layer within ccip that

allows any offchain system to interface

with hundreds of different chains

through a single standard a a single

methodology that leverages their

existing signing Keys their existing

infrastructure to then affect onchain

events on hundreds of different chains

when you put all of this together what

you find is

hundreds of thousands of chains with all

of the world's value on them with more

advanced smart contracts like rwas like

various lending protocols derivatives

protocols secondary market exchange

protocols all of which require larger

and larger amounts of data to function

whether that's to do the transaction at

all or whether to comply or whether to

do any number of

steps and then you have a need to

connect all those hundreds of thousands

of chains into a single internet of

contracts similarly to how tcpip

connected many different Technologies

separate Technologies into the internet

into the shared Global Internet that

houses both Banks and finex startups and

largest institutions in the world

they're all on a single internet so

that's really what I I think we're

involved in doing at this point we as a

community have done a really great job

uh with web 3 powering the majority of

defi powering the most rwa

implementations power ing the most proof

of Reserve implementations because of

the security and quality of the chain

link system and the different parts of

the protocol and that's a great

achievement that's a great thing that

I'm very proud of and very very grateful

to all the people that I have the luxury

of working with and pleasure of learning

from and and also the community which

done which has done a huge huge amount

of effort to get us to this point so

that's a great place that we've gotten

but in getting to that place we have

kind of earned the right we've earned

the position from which we can now

become the way the rest of the world

operates as it transitions into this new

blockchain

format that's the fundamental thing

that's really happening is that every 40

50 years you have a reformatting of how

all value exists the last reformatting

was from paper into digital into the

internet and that was uh Once In A

multi-life Time opportunity

now that is happening again so now after

40 50 years all of the world's value is

being reformatted into this blockchain

format for everything real estate

equities Commodities Insurance gaming

global trade all of

it because it's a fundamentally Superior

way for transactions and peer-to-peer

and digital relationships to operate

that are that is guaranteed rather than

probabilistic right so it's just a

superior format for how value and

digital relationships are

managed in the process of this

transition there's a lot of surrounding

problems how does data reach the value

how does the value move across chains

how does all of this stay synchronized

with the existing infrastructure of the

world how does the value on the existing

infrastructure migrate into this new

format how does all of that interact in

more and more advanced Ways by proving

more and more things about the the

underlying value to the user in a

cryptographically guaranteed manner

justifying the blockchain format as a

better and better way to have value and

and manage

transactions these uh fundamental

problems are basically the problems that

we now have the opportunity to be the

group of people to be the community that

solves these problems we have gotten to

that point through over seven years of

very hard work uh together with some of

the smartest people in the world some of

the best Security Experts some of the

greatest engineers and some of the the

the most committed thoughtful helpful

great community

members but now we have this chance to

be the way the world works for the next

40 or 50 years as this big transition

happens and that I think is the really

exciting thing for me and if that

transition happens I think Society gets

two very big things the first thing that

gets is in developed countries

everything works much much better

information asymmetry goes away in

markets to a large degree because

information is in the asset and people

can't game the system systemic Financial

booms and bust get smaller because

people can make more rational decisions

the whole financial system works better

everybody has access to more assets you

can buy a fractional piece of a hotel or

the restaurant you go to there's a lot

of exciting thing that happens in

developed markets both for how the

system structurally works

for society's sake and the new kinds of

products and things that become

available and then in Emerging Markets

we arrive at a world where people go

from zero to one where they didn't have

a bank account they didn't have an

ability to buy insurance they didn't

have an ability to participate in the

global Marketplace through global trade

and now they have all of those things

because they don't need to rely on their

legal system they can now rely on the

cryptographic guarantees of smart

contracts as an alternative system of

contracts that is sufficiently easy to

use sufficiently secure and sufficiently

globally connected that they can

transact with other people and they can

hold value in not a bank account but a

stable coin or a central bank digital

currency or a tokenized deposit of some

kind and they can now change their

entire economic life as a result of that

in ways that people in other countries

take for granted so really I think what

the telecommunications companies and

Industry did for

communication and what the internet did

for education and information transfer

is what blockchains will do for people's

economic

future that is really the thing that

over the next 10 20 years I think will

arrive at if all of this is

successful so I'm going to continue

meeting with a lot of these ingrained

large institutions that have all of this

value I think chain link due to its

security and reliability and all of its

great features and properties will

continue to be the global standard in

web 3 and then if it's the standard in

web 3 for how price data transactions

work and it's the standard for how price

data and various uh transfers and

transactions work in the capital markets

we actually arrive at a world where

those two worlds can interoperate pretty

seamlessly and once again we form what

we call the internet of contracts in

that case so this is the big body of

work we're involved in very grateful to

be working on it with many great people

including the people in our community

and very excited to see where it goes

next uh I think over the next few years

we're really on the cusp of something

quite big because I'm seeing the entire

world moving in a direction where just

like defi couldn't operate without what

chain link provided in a secure reliable

way I don't see how this big transition

can happen without chain link providing

what it provides in terms of the data

identity connectivity and all these

other properties that are needed for

this transition to happen so I think

it's a very exciting time and really

looking forward to doing it with with

all of you so thank you