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WTF Is Chainlink’s Internet of Contracts? 🤯
GM DOers! 😎
On Monday at EthCC, Chainlink broke the decentralized internet by announcing The Chainlink Cross-Chain Interoperability Protocol (CCIP). 🤯
That’s 5/5 buzzwords, all in 1 announcement. Must be a record. 😅
But it’s actually a big deal. Hint: It aims to address one of the biggest hurdles in the blockchain space - interoperability. ⛓️
Put simply, CCIP aims to connect hundreds of different blockchains, sidechains, Layer 2 networks, and more, with the goal of eliminating the barriers that slow innovation and prevent mass adoption of web3. 🌊
Today, we’re going to go over the most important benefits that Chainlink’s new protocol brings.
Let’s go 👇
👉 Lens Protocol: The Future of Social Media
Decentralized social media finally allows creators to own their content, data and followers. That’s why we choose to build part of our media platform on Lens Protocol.
Interoperability: Building Bridges 🌉
On a technical level, CCIP facilitates seamless and secure asset transfers across multiple blockchain networks, enhancing cross-chain utility. ⛓️
Think of this as building bridges between isolated islands (blockchains). By doing so, it allows travelers (data and digital assets) to move freely from one island to another, making the entire archipelago more accessible and valuable.
We noticed the need for this when we launched our free mint on Zora earlier this week.
Because Zora launched a new L2, they now make you bridge your assets from Ethereum to Zora. 🤦
Sure, the gas fees are much much lower, but the UX is way worse. We’ve had many people complain that this isn’t working. Here’s an example.
Oh, yeah, don’t forget to mint our new logo on Zora for free. The opportunity to do so ends on Sunday. 😁
Bridges in web3 are very annoying – and sometimes unsafe. We wrote about that here.
And Chainlink is aiming to fix that problem with CCIP, striving to build the so-called Internet of Contracts.
The what now? 🤔
The Internet Of Contracts: WTF Is That? 🤷
CCIP is aiming to become the blockchain equivalent of TCP/IP – another acronym that nobody freaking understands. 🙃
But TCP/IP, which stands for Transmission Control Protocol/Internet Protocol, is the fundamental protocol that governs how data is sent and received over the internet.
It’s basically what allows us to communicate with each other on the internet. 🗣️
Today, blockchains work separately, and having multiple blockchains is like having multiple internets.
And CCIP wants to fix that by enabling all blockchains (or those who plug into this protocol) to communicate with each other – creating an Internet of Contracts.
If used properly, it would remove all friction that bridges cause today, and for the average user or developer, using multiple chains would feel like using a single one. 👀
You can start saying goodbye to bridging your assets or other useless shenanigans that we’re forced to do today. 👋
But what about security? Is this safe? And how about tokens? Which tokens will we use with CCIP?
Before we talk about that, it’s announcement time:
Phase 2 of Web3 Academy 2.0. 🟣 is here!
Our Lens Protocol handle was stolen and we therefore partnered with Whag to bring verified links to our community so nobody falls victim to scams in the future. 😤
With our Whag integration, every time you click a link from Web3 Academy, you’ll see this pop-up. 👇 This acts like a confirmation that the link you've clicked on is legit & not a scam! 💥
This will not put a stop to scams in web3. But it will hopefully slow them down. 🤞
Join us in our upcoming Twitter Space, as we're joined by Sebastian Ornstein from Whag to explore how we can solve scams in web3. 🎣
Monday, 12PM EST! ⌚
Whag is also, conveniently, a Web3 Academy partner, so check ‘em out. 👇
🤝 Thanks to our trusted partner, Whag.
Web3 users lose billions of dollars every year due to phishing attacks. Luckily, Whag uses verifiable links so you can rest easy, knowing that every link you click on is safe.
Just click below to see for yourself. The first 1000 users that sign up and use the code “free1000” get free access FOR LIFE.
Security 🪨 & Tokens 💱
CCIP aims to act like a universal adapter that lets you plug in your devices anywhere in the world, regardless of the socket type. 🔌
It means that it acts as a blockchain abstraction layer, enabling enterprises to connect with any blockchain environment and use any currency they want to use, to reduce payment friction.
With CCIP, developers don’t have to care about which chain they’re using to build their products. And that’s HUGE. What’s even bigger is that you can now use any currency you please – which is very important for UX. 🌊
However, there is a surcharge of 10% for paying in alternative tokens versus $LINK payments if using CCIP. Big for $LINK. 👀
Now, security… CCIP incorporates two key safety features that stand head and shoulders above other cross-chain solutions.
First up, we have Customizable Rate Limits. This feature sets a limit on the frequency or volume of token transfers between different blockchain networks.
CCIP sets a limit on token transfers, preventing overload and potential abuse of the system.
But that's not all. Enter the Active Risk Management (ARM) Network.
This real-time surveillance system keeps an eye on all cross-chain transactions happening through CCIP – similar to having a 24/7 CCTV monitoring your transactions, making sure everything is valid and safe.
If the ‘24/7 CCTV monitoring’ expression gives you shivers, we feel you. It sounds like it’s all against the principles of web3. 😅
But the ARM Network is an independent, secondary network of nodes that verifies the behavior of the primary CCIP networks
If anything fishy is detected, the ARM Network springs into action, enhancing the safety and integrity of cross-chain transactions.
It sounds like the process is decentralized but we won’t know for sure until it’s battle-tested.
Together, these two features form the security around CCIP, ensuring that your cross-chain transactions are not just swift and smooth, but also safe and secure. 🛡️
No Stupid Questions in Web3 - AMA with Kyle & Jay 🗣️
Join us on Tuesday, July 25th at 12:00 pm EST in our token-gated #pro-meet-up Discord channel for our upcoming AMA.
We are meeting our PROs to demystify the tech, ease your mind, and remind you that there's no judgment!
AMA is exclusive to PRO members. Book your calendars here and…
Key Takeaways & How You Can Benefit 💰
CCIP aims to become a global open-source messaging standard that will settle all token transfers, cross-chain DeFi transactions, and even gaming actions, even if these span across multiple chains.
The key takeaway here is that, as a user, you can start using the blockchain for its core benefits, without worrying about the underlying tech – which will likely encourage many normies to use it.
But how can you interact with CCIP, what potential unlocks will this tech bring us, how will it benefit Chainlink and its $LINK token, and what’s the opportunity for YOU, as an early investor and builder in web3? 🤤
The following section is usually exclusive for PRO members. But today is Friday and we’re feeling generous, so we’re removing the paywall. 🔓 Enjoy. 👇
First of all, you can already interact with CCIP through Synthetix and Aave:
Synthetix is using CCIP to burn and mint tokens across chains safely and accurately.
Aave is using CCIP to power cross-chain governance.
Both will use it for much more in the future: cross-chain markets, cross-chain lending, etc…
Furthermore, Chainlink has partnered with SWIFT to create a bridge between real-world assets and DeFi.
This would allow any customer of any bank to use Chainlink’s CCIP to send money from A to B – this initiative would bring the trillions of dollars that are currently settled with banks, onchain.
And doing so without forcing the user but by presenting the benefits: Faster, cheaper, and more secure payments using the blockchain.
With this partnership, Chainlink's CCIP makes 11,000 banks interoperable with all relevant chains through a single interface.
And that changes the narrative for Chainlink’s $LINK entirely.
As I mentioned before, there’s a surcharge of 10% if users want to use other tokens like ETH to pay for gas over the CCIP network. If you choose to use $LINK, it’s free.
So, most likely, $LINK will become the universal gas token for any transactions happening on CCIP, as it’ll start to gain adoption (and it most likely will). 🚀
The potential for fee generation from usage is on par if not greater than any other blockchain.
Top this up with the potential integration of staking on CCIP (where a share of fees is planned to be channeled to stakers) and you completely revamp the utility of $LINK.
Now, to be clear, we’re not saying you should ape into $LINK – we haven’t done a deep dive into its tokenomics yet so we can’t say that the token will do good over time.
Reply to this email with a yes if we should do a PRO report on $LINK’s tokenomics.
But what we can say now is this: The Chainlink team is SHIPPING. ⚓
Over the years, they’ve proved to be very reliable:
Furthermore, earlier this year, Chainlink announced Functions. Remind yourself about Functions by reading our article about it here.
Lastly, we wanted to remind you of Chainlink’s dynamic NFTs. Michael Robinson from Chainlink came over on the podcast to talk to us about that. Get the lowdown on your fav platform:
Chainlink CEO, Sergey Nazarov, and his team have shown us they know their stuff.
If there's any team that can bring such a game-changing system to life, it's them!
Now, we're waiting to see how this all turns out. But if you're a web3 builder or user, it's a good idea to check out the features that CCIP makes possible.
Try using these features on platforms like Synthetix and AAVE. See if they really improve the UX. If you think they do, dive deeper and see how you can build apps with it.
For those of you who invest, it's smart to keep an eye on $LINK. Regardless of the underlying tokenomics (which we’re yet to fully analyze), all the excitement around what Chainlink is doing could push its price up, especially in the bull market.
But remember to do your homework before you invest. Look closely at the tokenomics of $LINK.
Thanks for reading. And remember, you're strong, you’re powerful, you’re alpha! ❤️
See you soon. ✌️
Disclaimer: This article is for informational purposes only and not financial advice. Conduct your own research and consult a financial advisor before making investment decisions or taking any action based on the content.