Chainlink Cross-Chain Interoperability Protocol (CCIP) Launches on Mainnet

The Chainlink Cross-Chain Interoperability Protocol (CCIP) has entered the Mainnet Early Access phase on the Avalanche, Ethereum, Optimism, and Polygon blockchains.

DeFi protocols in derivatives and lending are “adopting CCIP, including Synthetix, which is live on CCIP mainnet, as well as Aave, with BGD Labs now integrating CCIP on mainnet into the protocol.”

On July 20, CCIP will become “available to all developers across five testnets: Arbitrum Goerli, Avalanche Fuji, Ethereum Sepolia, Optimism Goerli, and Polygon Mumbai.”

Web3 is now “a multi-chain landscape.” There are hundreds of blockchains, layer-2 networks, sidechains, subnets, appchains, parachains, and other environments “for developers and users to choose from.”

While the launch of new on-chain ecosystems “has driven innovation and adoption, it has also fragmented applications, on-chain assets, and market liquidity across different, disconnected blockchains.”

Furthermore, existing cross-chain solutions “are complex—generally involving a multitude of technology stacks across protocols and chains—and often insecure, with $2B+ stolen due to cross-chain exploits.” This lack of interoperability results “in slower innovation and is holding back the progress and mass adoption of Web3.”

But solving this problem is very hard. It’s not just about “building the right product. It’s about building a standard that the whole industry can embrace to interoperate and build on top of each other.”

Building a cross-chain standard requires security, flexibility, and community. Security because moving value “across chains needs to be highly reliable.”

Flexibility because the standard needs “to accommodate all the use cases that developers will come up with and all the chains they want to build on. And finally community, because this standard is only as valuable as the community that adopts it.”

Chainlink has already “built the industry-defining secure standard for Data in Web3, and thanks to all our users and partners, has built an incredible community.”

For all these reasons, Chainlink is uniquely positioned “to extend this standard to solving the cross-chain problem and unlock a new wave of innovation in Web3.”

Just like Web2 needed TCP/IP “to connect isolated islands of computer networks, Web3 needs an interoperability standard to connect islands of blockchain networks.”

CCIP is described as “the most secure, reliable, and easy-to-use interoperability protocol for building cross-chain applications and services. Not only are developers given the flexibility to build their own cross-chain solutions on top of CCIP using Arbitrary Messaging, but CCIP also provides Simplified Token Transfers—which enables protocols to quickly start transferring tokens across chains using audited token pool contracts they control without writing custom code and in a fraction of the time it would take to build on their own.”

CCIP is powered by Chainlink decentralized oracle networks, “which have a proven track record of securing tens of billions of dollars and enabling over $8 trillion in on-chain transaction value. Since CCIP is built on the same foundation as existing Chainlink services, it requires little-to-no additional trust assumptions.”

If a dApp already relies on Chainlink for Price Feeds, then “relying on CCIP for cross-chain interactions is an obvious choice. CCIP also features additional safety mechanisms that go above and beyond other cross-chain solutions, such as customizable rate limits on token transfers and a separate Active Risk Management (ARM) Network that monitors the validity of all cross-chain transactions.”

Developers, applications, and enterprises can use CCIP to unlock a variety of use cases, such as:

  • Cross-chain tokenized assets: Transfer tokens across blockchains from a single interface and without having to build your own bridge solution.
  • Cross-chain collateral: Launch cross-chain lending applications that allow users to deposit collateral on one blockchain and borrow assets on another.
  • Cross-chain liquid staking tokens: Bridge liquid staking tokens across multiple blockchains to increase their utilization in DeFi apps on other chains.
  • Cross-chain NFTs: Give users the ability to mint an NFT on a source blockchain and receive it on a destination blockchain.
  • Cross-chain account abstraction: Build smart contract wallets with native CCIP capabilities to improve the user experience of making cross-chain function calls. For instance, enable users to approve transactions on any chain using a single wallet.
  • Cross-chain gaming: Create blockchain-agnostic gaming experiences that enable players to store high-value items on more secure blockchains while playing on more scalable blockchains.
  • Cross-chain data storage and computation: Employ data storage solutions that enable users to store arbitrary data on a destination chain and execute computations on it using a transaction on a source chain.

As noted in the update, Synthetix is a DeFi protocol that “acts as a liquidity layer for an ecosystem of on-chain derivatives and financial instruments.”

One of its recent additions “to Synthetix V3, the Synth Teleporter, provides users with a streamlined method for transferring Synth liquidity between chains.”

This feature operates by “burning sUSD (the protocol’s unit of account) on the source chain, then minting an equivalent amount of sUSD on the destination chain.”

The Synth Teleporter employs Chainlink CCIP “to burn and mint tokens across chains safely and accurately, ensuring security and reliability.”

This unique burn-and-mint model “promotes higher capital efficiency without the need for liquidity pools. In doing so, Synth Teleporters enable Synthetix liquidity to flow toward areas with the highest demand, bypassing constraints associated with traditional token bridges.”

Kain Warwick, Founder, Synthetix, said:

“Security is critical when dealing with on-chain assets, which is why we leverage Chainlink CCIP for our cross-chain Synths Teleporter. As one of the first users of Chainlink Data Feeds, we’re thrilled to get first access to CCIP and all the functionality it unlocks for Synthetix.”

For more details, check here.

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