Building the Next Generation of DeFi Applications

Transcript

foreign [Music] hi everyone great to see you here and I I gotta say it's been an awesome conference you know the whole bear the bear thing the more interesting people come out and I really am thrilled about the vibe of some of the people I've seen and the creativity and it's just you know great to be back with you at like a real industry conference so really great to see many of you again um I think what what I'll be discussing

with you today is how we build the next generation of safe reliable D5 applications and I think what's useful for us is to look at it in a historical context to start so Bitcoin came out of the 2008 financial crisis and the failures there and the failures there had two uh properties that we don't want to replicate the first one was it was basically an unsafe Financial system that aggregated risk in a way that led to massive failure and lost people's faith and then the second thing is that along the way there was a lot of value extraction that accelerated and contributed to that failure I think that our industry is at a very

important point where it's going to have to make some really critical decisions about either replicating this model or making the better more secure more reliable transparent safe alternative I'm definitely here for the second one the place where I think we're at in the historical context of our industry is where exchanges were after mount gox so before Mount Cox all exchanges seemed like a great idea and they seemed like they were you know obvious and then after Mount gox security and reliability of exchanges became a real question and that's when the best exchanges started to appear the ones that generated and delivered real security this is what coinbase was built out of

and a lot of other exchanges is that they became the safe and reliable place to transact cryptocurrencies we in our current evolution of the industry are in the same place where we've made some Financial products it was a lot of fun but some of them weren't made in the way that they could sustainably exist and safely continue to deliver their promises and this is shown by the last headline where there were a number of failures which have now taken our industry back down so we're at this kind of step in the pattern where it would really behoove us to build a safe and reliable version of all the exciting Financial products that we've been building to make our industry

into the safe and reliable alternative Financial system and I think if we do that we can become the financial system in working on all of this for many years being in Industry since 2010 we've seen and I've seen a lot of attack vectors and some of those we we've come to address with the technology of chain link the the first attack Vector that we worked on was the data feeds and the ability to manipulate markets Based on data this is an obvious attack factor that people use to manipulate markets and extract value the second attack Vector is now Bridges and the ability for someone to steal

money from a bridge is something that puts the whole system at risk the whole blockchain financial system because if you take your value from one place and send it somewhere else but in the process of sending it it gets stolen that doesn't really work right that does that's not how transactions work that's not how a financial system can work and then the final problem is really how to avoid manipulation of contracts and their execution often known as Mev front running back running sandwich attacks and all these things this one is less understood but I think will be equally important because as the volumes grow the amount of manipulation here will will also grow so our body of work has really been

around solving these problems in order to provide a safe and reliable infrastructure that can allow all of you to build a safe and reliable Financial system because once again I think that the Genesis of our industry is that there is an unreliable Financial system and that cryptographically guaranteed outcomes and systems can create a safe and reliable Financial system that I think is what we are really here to do in the process people make money things grow that makes sense you need incentives but at the end of the day what we're really building is a safe and reliable alternative Financial system

what we are doing in that equation is we're providing the infrastructure the data feeds the compute and now the cross chain ability to S to send value into your application this is really what our body of work is about it's how do we provide cryptographically proven data that can be reliable enough to control and Trigger large amounts of value how can you have cryptographically trust minimized compute that levels up with blockchains are capable of doing and does it in a way that protects the transactions and the smart contracts from manipulation and now with the launch of ccip here at ECC we're able to also provide the access to value that

resides on various public chains and relatively soon Private Bank chains which have even more value that can flow into these applications to make them successful and useful I strongly believe that the ability for Value to flow in these applications will once again depend on them being a safer more reliable alternative than how The Current financial system works which thanks to cryptography and decentralization we are in a very unique position to build and right now while things are in a law they're in a law because we didn't do that basically and if we do that they won't be in a lull and you know the boom times

will be back uh and I think even more because not the Dynamics of speculation but the Dynamics of a safe and reliable better alternative for Lending derivatives um ownership Insurance gaming you name it so this is the the body of work I think we're involved in together with you so far we've been able to help uh process over eight trillion dollars worth of transactions which makes the chain link Network one of the top value transaction processing systems in the entire blockchain industry we've put close to 10 billion uh data points on chain to trigger all of that

value and that's been done with basically real consistent security that's resisted adversaries and resisted the congestion and failure modes of various blockchains and now we're applying that knowledge of how to create secure and reliable infrastructure to the Cross chain problem which last year Alone lost people two billion dollars when people lose two billion dollars by using a system they don't want to use it because they lost two billion dollars and so if we can solve that problem through the same security that allowed D5 to grow from sub 100 million to over 200 billion

then because this is actually the mechanism through which value flows between chains and hopefully soon into chains we can grow the whole industry by in my opinion orders of magnitude this is now live on minet and it's available for General access to developers today we've built it for you to connect your applications to multiple other chains where you can gain value to use multiple other chains in what we call an internet of contracts and to gain access to value and actually other places such as Bank chains which is something we hope to be able to provide soon so if you have cross chain problems if you want a reliable cross-chain bridging

mechanism for transactions and messages and value I think you should take a look because we spent three years building this and it's something that we think will solve this problem in the same way that the data oracles solve the data problem for defy and allow D5 to grow into what it is today so this is the same pattern we're hoping to to see with this is that not only do we help you build great applications but in the process the entire industry grows and becomes about much more this internet of contracts is obviously not something that we're going to build you folks are going to build it what we're going to do is try to provide the most secure and reliable infrastructure we can that gives you

access to the most and highest quality data the best and most useful trust minimized compute that you need but a blockchain can't provide and connections to all the places that you want to send and receive value to and from together with a messaging system that can make that easy and seamless so you can remove the UI burdens of your users and put them into the back end and into the system one of the big things that we're very hopeful of and and working hard on is the ability to get Bank chain value into your applications into the blockchain ecosystem so if we're able to build safe reliable applications that process transactions

at the speeds that real large asset managers hedge funds banks are used to and we have this property that their counterparty risk is lower because the data that's used and the computation that's used in the cross chain mechanism that's used is not easily manipulated then the value would flow into a better system and so these are the kind of rails and the systems that we're setting up so if you folks are interested in working with the value that you see in Banks going on to chains there in private bank chains and app chains that they're all making then ccip also has a dimension of that and it's something that I think will be

a very big deal because the amount of value that we can get from the worst of the world is very large but through the historical aggregation of value into Banks and asset managers in the last let's say 100 years there's tens of trillions of liquid value that can flow into the blockchain ecosystem and that liquid value is just now like right about now getting put on a bank chain so that's um in my opinion a real opportunity and one that we want to facilitate in a secure and reliable way to show the world that they are better off using the blockchain financial system

and accelerating that as much as possible both for public chains and for banks because frankly the better the applications you build the more attractive this whole blockchain thing will be for all the people with money whether they're big Banks or individuals or asset managers or whoever so we are very eager to be our partner to help you do that to avoid all the security and risk issues and to enable you to build the applications that can be attractive in this way where I think this gets all of us is this internet of contracts where the Global Financial system is on chain

this I think is our fundamental shared goal is that the world now works in a provable cryptographically guaranteed decentralized way that's fundamentally Superior to what you have today and is much better for society so this is the final end State this is where we want to arrive and this is what we're going to do our best to facilitate for you to be able to do I think the launch of ccip is an important step in that direction and together with all the other services on the data side the automation side and now on the cross chain side we hope to provide you with um all the data you require in a trust

minimized way all the computation you require and Trust minimized way and now all the cross chain communication and value that you require in a trust minimized way I think what's very important from your point of view is that instead of replicating the fragile schemes of the past that as they grow fail and lose people value I think it's very important that we reach a new level of security and reliability and the ability to prove that to both our industry and the larger Financial system

and this is the stage that we're at the pattern at this stage I've you know seeing being in this industry since 2010 is is is always the same either you learn from the recent failures and you make better systems and the standards that users apply to you as an application are higher so users actually have a role to play here as well where they should um connect their usership and their demand to better security and better reliability if that's what they actually want from applications and so either you learn from the failures of something like Mount gox and you build better centralized crypto exchanges and you have a centralized

crypto exchange ecosystem to power the next you know five six seven years of crypto trading which is what happened with crypto exchanges which is why you have such large volumes on them because they learned that lesson and they built a secure version of themselves and that drove the industry to the heights where it is today or you don't um I'm very hopeful that we do and we're here to support you in building all of these applications in the most secure reliable way possible whether you're a small application that's just starting out we've made all of this accessible to you in various ways or whether you're a large application that secures billions of

dollars we have an ability to scale security with the size that you secure so I hope this is all useful to you and that the cross chain system is something that allows you to gain access to more chains eventually Bank chains and more value and we're always here to help you build the future and excited to be working with you so thank you very much um decided to make it brief this time and appreciate all of your interest and attention in building all of this with us thank you thank you [Applause] um decided to make it brief this time

and appreciate all of your interest and attention to building all of this