As decentralized finance begins to gain ground, Chainlink co-founder Sergey Nazarov believes there are two ways for more mainstream adoption.
Speaking at the Smart Contract Summit, Nazarov said he sees two ways DeFi “crosses the chasm” and more Web 2.0 companies to adopt these technologies.
“The transition occurs in two different key dynamics. The slower path is in the interest inflation. We’re currently in a low-interest environment and the appetite to combat inflation will be massive. The second, and the faster path, is through counterparty risk. This is where the solvency of brand-based guarantees erodes and math-based contractual guarantees come in. The slow case is compelling, the fast path is scary, but we will be seeing both.”
He added one of the exciting possibilities for DeFi is when people start thinking of blockchain for financial products, transitioning from the idea that blockchain is for tokens only. He said the industry would eventually see investors have crypto because they believe it has superior value over other financial products and not hold crypto only as a means of diversification.
Nazarov noted data, such as market data, is always essential, but so is privacy. He pointed to its newest acquisition, DECO. The DECO protocol uses advanced cryptography and zero-knowledge proofs to provide enhanced privacy to users.
Chainlink is a big player in the DeFi space. Its LINK token saw a meteoric rise this year as interest in it is at an all-time high, as previously reported by Cointelegraph.