Interview with Babbitt | Expanding the definition of smart contracts, how does Chainlink build the safest predictor?

Blockchain, a word full of technology, some people think it is too far away from the real world.

This is because real-world events are completely isolated from the data on the blockchain. In order to close the distance between the two, Chainlink appeared.

Last week, I met Chainin CEO Sergey Nazarov in Shanghai, who called himself "one of the members of Chainlink." He is one of the few foreign friends I met, not knowing China through food.

I learned from his mouth that this is a blockchain entrepreneur who has read Confucius and Taoist doctrines, and also recognizes the philosophy behind Chinese culture.

“I think China’s development is so good because the Chinese have a strong cultural literacy. For me, this has some truth. It makes sense for China to become a global market, as well as in the cryptocurrency world. I am very happy to see that there is a certain popularity in China (blockchain). I understand that this depends to a large extent on factors such as supervision. I am also impressed by the speed of China’s problem-solving. Some things may not be realized for a while. But there are solutions in two weeks. This is the ability of China to solve problems when necessary. So I think it is great from this perspective (China)."

In this interview, taking the potential of smart contracts as an entry point, we talked about the meaning of Chainlink and the application of smart contracts.

Smart Contract: Defining the relationship between people

Since entering the cryptocurrency field in 2011, most of Sergey's work experience has been related to smart contracts. Sergey believes that smart contracts will have a major impact on all digital protocol functions. The existence and operation of many societies are based on smart contracts, and the progress made in the process of reaching an agreement has produced a lot of economic activities, which ultimately created a booming ecology.

Sergey told me:

"At this stage, in my opinion, smart contracts are the first highly reliable digital protocols. This means they can define the relationship between people in a fair third-party identity."

Today's digital protocols are not subject to fair evaluation due to the control of a centralized organization, and may be terminated or switched to a model that is conducive to a specific population at any time.

Sergey said that the potential of smart contracts is based on two points, one is as a fair third-party execution agreement, and the other is to send transactions without the need for a bank.

The first application potential is completely different in developed and developing countries. In developed countries, the application of digital protocols is already the norm, but there are significant restrictions, which have caused serious systemic risks. The 2008 economic crisis is a typical example. Sergey said that the issue of transparency that triggered the economic crisis was related to the lack of real-time updates on the status of the contract. If the smart contract already exists, the situation of the mortgage can be publicized, the personal credit status can be updated, and the reliable information record of the trip can be shared among multiple agencies.

“I think a lot of technology will be used in more developed markets after polishing, improving its existing digital state and solving different types of optimization problems.”

In contrast, smart contracts are more likely to be used in developing countries to create contracts that should exist, such as agricultural insurance. In developing countries, no one wants to set up an insurance company, and no one wants to trust an insurance company. Therefore, a smart contract can become an impartial third party and establish a trust relationship between farmers and insurance companies.

As for the potential of smart contracts in sending deals, Sergey talked about his experience when he first entered the ring. He saw some startups that allowed users to send Bitcoin via feature phones (mobile devices other than smartphones). These users usually don't have a bank, and the way they can send assets just by flipping their phones is great.

Even more eye-opening is that these users can create a mechanism similar to multi-party signing to form a third-party custody – for example, sending a sum of money requires three of them to agree, which, in Sergey's view, is the most basic contract.

Chainlink: Expanding smart contract definitions

Smart contracts are a great invention, and its wide-ranging application is not destined to be a “single fight”, which is why Chainlink exists.

Sergey said that the most common application of smart contracts is to generate and transfer token data, which is a necessity for each blockchain and an entry point for this domain. Token has received a lot of attention because the current smart contract can only do this.

However, Sergey believes that the application of smart contracts should not stop there.

"We think we can solve the problem and what we think is hindering the development of this area is that smart contracts can't get event data and can't generate external events."

Smart contracts must have the ability to generate external events: for example, market events, that is, changes in market prices of financial products; for example, weather events for farmers, crops, and insurance; for example, maritime events, that is, the location of goods, international settlement, and various Contract for international shipping.

Due to security issues, the blockchain base layer cannot trigger the above behavior. When data is acquired by a single miner, there is a risk that the contract is controlled; all miners can obtain the data, which will expose the base layer to risk.

In this regard, Sergey pointed out:

“The unique feature of smart contracts is that they provide extremely high reliability, which comes from the limited performance of the base layer. What we want to do is to extend the application of smart contracts while ensuring reliability.”

In other words, Chainlink hopes to expand the definition of smart contracts while implementing smart contracts and related events. The smart contract extends from the transfer token to a logic that defines the state of the event. The relationship between the state change logic and related events creates a completely new technology, the oracle that connects external events with smart contracts. .

"Expanding the definition of a smart contract is what we have to do. We are on the way to this goal. We hope that by creating an infrastructure, people can create contracts that can be used and generate events so that they can be implemented faster. Goal. This is the goal of Chainlink."

Chainlink predictor multiple protection

As the world's first decentralized oracle in the blockchain world, Chainlink believes that the safest predictor requires defense in depth—that is, multiple security modes.

At the base layer, Chainlink uses its own security model, including extreme redundancy and decentralization, where multiple independent node operators agree on calculations. The consensus of blockchain networks is achieved through transaction-related calculations, and Chainlink's focus on computational types is to validate external data sources.

“The node operator will reach a consensus on the data source selected by the user and the events that occur, thus achieving a certain level of reliability to trigger the specific value of the contract.”

The higher the contract value, the higher the level of guarantee that the user pursues, that is, the level of decentralization pursued will increase. Assuming a contract worth $1,000, the user might only deploy three oracles; and if the contract value is $1 million, the user has more predictive opportunities to deploy.

The second security model adopted by Chainlink is proven security, which contains a large amount of information that is difficult to obtain and cannot be tampered with, thus proving that the contract owner (the predictor) is secure. It is like signing a service agreement with the oracle, clearly defining the tasks it needs to accomplish: for example, a oracle predicts several contracts; whether it is faulty; what is the amount of stake [1] ; the predictor operator Identity and so on.

The Trusted Execution Environment (TEE) is one of the more stratified layers based on provable security to protect the security of the oracle. This enhanced version of the computer environment avoids revealing the calculated content to the node operator while ensuring security and reliability.

“Overall, we are stratifying based on a high degree of decentralization, and people can choose according to their own budget, which ensures that your oracle is relatively safe. A certain number of oracles allow you to enjoy a certain degree. Security. You can also choose other features, such as TEE, and the cost you pay will be comparable to the contract value of the oracle protection."

Three-pronged approach: Chainlink development plan

Sergey said that the main online line has been Chainlink for nearly four months, with the most decentralized network of oracles.

In the future, Chainlink's development focuses on three areas: expanding high-quality nodes; increasing high-quality reference data; and expanding data integration teams.

At this stage, the nodes of the Chainlink network have more than 260 tasks or calculations.

"We want to strengthen the security of high-quality node networks. We want to increase the types of calculations that nodes can perform. We want to increase the resources of integration so that users can use Chainlink. We want people to experience more practical in this process. Sex."

In addition, Chainlink plans to provide more high-quality reference data for use in DeFi projects. The process of generating this type of data is fair, non-competitive, high quality, and open source, allowing many projects to participate. At this stage, it has launched seven new data reference networks, which will continue to increase in the future.

Finally, a good team is fundamental to a startup. Chainlink will continue to introduce more talented people, especially its data integration team. The team is responsible for accessing external data and resources and is a boon for DApp developers, DeFi, and decentralized insurance programs.

“Overall, our plan is to create a safe, easy-to-use oracle, to provide high-quality reference data for the DeFi field, to promote its application, and to provide high-quality data integration services.”

Where is the smart contract first used?

With the oracle of safely introducing external data, what areas will smart contracts first land in? Sergey believes that DeFi ranks first, then decentralized insurance, followed by game security.

The DeFi field requires a large number of reference data contracts. Sergey said that the cost and effort of Chainlink to create high-quality chain resources may not immediately bring huge benefits, but it can create an infrastructure that DeFi developers really need. These chain resources may initially be limited to a small number of DeFi developers, but can eventually be extended to more projects.

Decentralized insurance involves a large amount of data integration work, including handling insurance data related to geographic location, weather, etc., and ensuring that the insurance contract contains the required inputs and outputs without burdening the developer. Sergey said that due to the complexity of decentralized insurance itself, the application of smart contracts in this field takes longer than DeFi.

Game anti-counterfeiting needs to be highly reliable and provable randomness to ensure a random data source and ensure the fairness of the game.

“When everything you invest in is your own, this is the best game resource.”

After this three-hour interview, when I asked Sergey what else to add, he replied, no, after watching this video, people who like us will naturally join our community. So, have you seen Chainlink with this video?

1. The stake in the Chainlink network is different from the traditional staking mechanism, but acts as a collateral for the node operator to ensure that it can provide the correct data and stay online, otherwise the mortgage will be forfeited.

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