The famous decentralized blockchain oracle Chainlink has rolled out a Cross-Chain Interoperability Protocol (CCIP) on its mainnet. The pronouncement conveyed by the Chainlink group on July 17 illustrated that the CCIP aims to support the development of applications and other services on the cross-chain.
A report conveyed by the chief product officer Kemal EL Mouiahid confirmed that the development could be accessed on Avalanche, Polygon, Ethereum, and Optimism networks. From Thursday, July 20, the developers using the networks above to build their projects will access the CCIP.
Significance of Cross-Chain Interoperability Protocol
In the initial development of the CCIP, the Chainlink team engaged at least 25 partners to conduct the trials. From the successful testnets, some partners, including Aave and Sythetix in the decentralized finance (DeFi), are among the early adopters of CCIP.
Besides the testnet, the team behind the CCIP confesses to integrating innovative security models to support the protocol. This security system corresponds to the power price oracles on the Chainlink platform that address common security threats, such as flash-loan attacks.
In an exclusive interview with the co-founder and chief executive of Chainlink, Sergey Nazarov, he affirmed that CCIP aims to become the leading “TCP/IP of finance.” Citing the core architectures of the internet that have existed for decades, the executive elaborated on the main features of the CCIP.
Unlike other advanced technologies, Nazarov confessed that the CCIP provides a distinctive communication system on the cross-chain. He explained that the CCIP can be used in the blockchain sector to connect applications on the DeFi platform with different chains.
The executive believes that the CCIP’s active management network will strengthen the security of other networks. He added that the CCIP would not only focus on crypto but on ways to improve system security.
Impact of CCIP on the Financial Sector
In his intriguing report, the executive confirmed that the CCIP will become a game changer in the finance sector. Similar to the primary function of TCP/IP commonly used to harmonize fragmented internet Nazarov believes that the CCIP will be utilized in uniting fragmented international financial models.
He mentioned that the CCIP has utilized cutting-edge technologies that will support establishing close links between the private and public financial systems. This will enable the users to access traditional finance and the crypto space, Nazarov added.
In the meantime, the Chainlink team has expanded its strategic partnership to work with leading financial providers in the traditional sector. In June, Chainlink sealed a partnership agreement with Swift, a global messaging network financial institutions use in international money transactions.
Since 2010 the Swift messaging platform has supported around 11000 banks in conducting international payments. In 2021 Swift supported banks to complete transactions worth around $1.8 quadrillion, according to the United States Financial Crime Enforcement Network (FCEN).
Features of CCIP
The partners aim to connect several financial institutions to the blockchain network. Under the partnership agreement, the Chainlink team allowed SWIFT to use the CCIP to connect with another blockchain.
Meanwhile, the Swift and Chainlink team plans to work on improving the interoperability protocol of the CCIP. A interoperability protocol supports the creation of blocks necessary for completing transactions. Therefore the interoperability feature will help the CCIP to curb the potential gaps between the on-chain and off-chain networks.
Besides the collaboration with Swift, Chainlink will engage will other partnerships during the pilot testing of CCIP. Nazarov affirmed that the CCIP project aims at ensuring all blockchain networks are connected to available bank chains. He added that connecting the banking system to the blockchain network will enable the financial service provider to explore the blockchain sector effortlessly.
In his report, the CEO noted that the CCIP will enable banks to access real-world digital assets. The executive vowed that Chainlink’s latest development will differ from previous projects.
However, since crypto has captivated investors’ attention, Nazarov remains optimistic that the developmentof CCIP will be the first down cycle for banks to offer digital assets to their clients. He mentioned that other subsequent phases would involve monitoring the prices of the crypto assets and market perfomance.
