Exclusive Interview with Chainlink Co-founder Sergey Nazarov: Building a Bridge Between TradFi and DeFi

2024.11.01

Exclusive Interview with Chainlink Co-founder Sergey Nazarov: Building a Bridge Between TradFi and DeFi

We are building not just technology, but an entirely new economic model.

2024.11.01 - 00:40:40

TradFiChainlinkDeFi

Navigating Web3 tides with focused insights

We are building not just technology, but an entirely new economic model.

Interview & Article: Anderson Sima, Executive Editor, Foresight News

Sergey Nazarov, Co-Founder of Chainlink. Image source: Chainlink

On the coast of Hung Hom, Sergey Nazarov gave a thumbs-up to his audience. As co-founder of Chainlink, he has remained at the forefront of the blockchain industry—from New York to Singapore and now Beijing. On October 30, Chainlink’s annual SmartCon conference was held in Hong Kong for the first time. Chan Hoi-lam, Deputy Secretary for Financial Services and the Treasury of Hong Kong, said in his opening remarks that the innovative potential of blockchain and virtual assets is exciting, and he looks forward to deeper integration between virtual assets and the real economy. In person, Sergey Nazarov fits the stereotype of a tech engineer—usually dressed in a T-shirt or plaid shirt. In an exclusive interview with Foresight News, he joked that jet lag might make him seem a bit "weird." Interestingly, he displays an unusual curiosity about electronic devices—for instance, he once expressed concern over how well a laptop dissipates heat on a tabletop. Nazarov’s journey into blockchain began in 2011, when the industry was still in its infancy and Bitcoin stood alone. He first encountered Bitcoin as a gaming enthusiast, but quickly became fascinated by the decentralization principles underpinning it. He realized that Bitcoin, as a global standard not backed by any corporation, had the potential to exist continuously for the next century—an unprecedented phenomenon in the history of digital currencies. As the concept of smart contracts gained traction, Nazarov recognized the immense potential of blockchain technology. Rather than competing with emerging platforms like Ethereum, he and his team chose to build an oracle network—a critical infrastructure that didn’t yet exist at the time. The development of oracle networks created a bridge connecting smart contracts to real-world data and systems, dramatically expanding the application scope of blockchain technology. Nazarov emphasized that Chainlink played an indispensable role in the rapid growth of DeFi (decentralized finance). Supported by Chainlink, the total value locked (TVL) in DeFi surged from less than $100 million to over $20 billion at its peak. Chainlink’s services have become an industry standard, enabling more sophisticated smart contracts and laying a solid foundation for DeFi’s evolution. When discussing Chainlink’s latest technological advances, Nazarov highlighted the Chainlink Runtime Environment (CRE). This technology can orchestrate multiple blockchain systems, much like Cobalt and Java are used in finance. He believes CRE marks a significant step forward in Chainlink’s efforts to integrate and apply diverse blockchain technologies. Moreover, Chainlink has made progress in privacy-enhancing technologies. Nazarov mentioned Privacy Gateways and cross-chain private transactions—technologies crucial for integrating traditional financial systems with DeFi. By providing privacy protection, he said, Chainlink enables more financial services to securely migrate onto blockchains. Nazarov likened Chainlink’s CCIP (Cross-Chain Interoperability Protocol) to TCP/IP in the blockchain world. Just as TCP/IP unified the internet, CCIP provides a standardized platform connecting different blockchains. With CCIP, Chainlink makes cross-chain transactions and communications simpler and more efficient. Nazarov also stressed Chainlink’s efforts in advancing standardization within blockchain technology. He believes standardization is key to blockchain’s development and a prerequisite for mass adoption. Chainlink is collaborating with regulators, financial institutions, and innovators worldwide to drive the standardization of blockchain technology. “We believe that through standardization, blockchain technology can better integrate into existing financial systems and bring greater value to the global economy,” Nazarov said. On the tokenization of real-world assets (RWA), Nazarov pointed out that unlike cryptocurrencies, RWAs require proof of authenticity and existence. Chainlink’s role here is to provide essential verification and identity validation, enabling RWAs to be tokenized and traded on blockchains. Additionally, Nazarov discussed the application of AI technology within Chainlink’s oracle networks. He explained that AI excels at converting unstructured data into structured, machine-readable formats. Chainlink can run multiple AI models and compare their outputs to reach consensus. This AI consensus mechanism works similarly to how Chainlink handles price data, delivering reliable data inputs for smart contracts. Nazarov also shared his thoughts on the future of blockchain technology. He believes its development involves not just technical iteration, but a profound transformation affecting finance, economics, and even social structures. He envisions a future shaped by blockchain—one that is more open, transparent, and decentralized. “What we’re building isn’t just technology, but an entirely new economic model,” Nazarov said. “Chainlink’s mission is to serve as a bridge between traditional finance (TradFi) and decentralized finance (DeFi), enabling seamless integration so they can jointly advance the global economy.”

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