Chainlink founder says CCIP opens DeFi for business

Chainlink’s Cross Chain Interoperability Protocol, to launch Monday, looks to build better bridges

article-image

Andriiii/Shutterstock modified by Blockworks

share

Chainlink is switching on its Cross Chain Interoperability Protocol (CCIP), Monday, with Synthetix getting early access to its mainnet. A testnet will open up to all developers on Thursday, July 20.

The protocol builds upon Chainlink’s extensive oracle network to differentiate it from competitors, while it looks to capitalize on connections forged along traditional financial rails. 

As blockchains scale — whether layer-2 networks, sidechains or app-specific chains — these networks will need to communicate with each other.

Existing cross-chain solutions — such as bridges, for example — have attempted to tackle the problem of moving data and assets safely, with mixed results

Other interoperability solutions such as light-clients such as IBC, general message passing like Axelar and other hybrid schemes have tried to fill the gaps, and now Chainlink is joining in the effort.

CCIP will first be available on Ethereum, Optimism, Polygon and Avalanche.

How does CCIP work?

In an interview with Blockworks, Chainlink founder and CEO Sergey Nazarov noted that Chainlink will use its oracle networks to enable CCIP.

“One oracle network is responsible for channeling messages and value. The other one is responsible for monitoring and determining if the properties of the transactions going through the first one are risky or not,” Nazarov said.

Developers who are interested in building cross-chain solutions can build their products on top of CCIP through Arbitrary Messaging. 

This means that a smart contract from Chain X will utilize Chainlinks’ messaging router to send messages to Chainlink’s decentralized oracle networks (DONs). These DONs will then securely and privately communicate with the destination chain messaging router, which will validate the information and send it to Chain Y’s smart contract. 

Source: Chainlink

Beyond having basic communication capabilities, CCIP also has complete token transfer capabilities, according to its documentation, which Chainlink says means that developers for token pool smart contracts won’t need to write customized code. 

A separate Active Risk Management (ARM) network aims to detect any malicious cross-chain activity. When found, ARM will automatically pause services and protect user funds.

ARM operates similarly to how banks protect their customers from fraudulent activity, Nazarov explained.

“If you have been sending money to a friend for years, Venmo, PayPal, very quickly approves it, but if you decide to send money to buy a painting from someone in Eastern Europe, they will have questions,” he said. “The fundamental idea is that you can accurately assess risk based on repeat transactions to known parties.”

Targeting traditional finance money

One of the most exciting aspects of introducing CCIP is its potential to link up DeFi with traditional financial institutions, Nazarov explains. 

Swift (Society for Worldwide Interbank Financial Telecommunication) is planning to use CCIP to work with multinational banks across the globe to bring institutional-grade, multibillion-dollar real-world asset tokens into the world of DeFi, Blockworks previously reported.

Among the banks signing on are Australia and New Zealand Banking Group (ANZ), BNP Paribas, BNY Mellon, Citi, Clearstream, Euroclear, Lloyds Banking Group, SIX Digital Exchange (SDX), and The Depository Trust and Clearing Corporation (DTCC), according to a press release. 

“When those real-world asset tokens become available, they can go over CCIP into the public blockchain world, which will do two things: It’ll grow the total industry size of the entire blockchain industry and it’ll provide diversified collateral,” Nazarov said.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Upcoming Events

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research

article-image

The stablecoin issuer now plans to offer 32 million Class A common stock shares at a price of up to $28 each

article-image

Let’s go whale watching, Bitcoin style: Investigating the mysterious “12ib7” wallet now worth $3.2 billion

article-image

Bitget’s L2 is undergoing a leadership change and will be helmed by Colin Goltra, formerly the blockchain’s chief growth officer

article-image

The funding was spread out across 61 rounds, a slight dip in both number of rounds and total funding in comparison to other months

article-image

Why is it controversial to say things are better than they used to be?

article-image

Wallchain could make influencer ROI more measurable for Solana businesses