CCIP is designed to enable interoperability between traditional financial companies and blockchains

​Chainlink launches cross-chain protocol on Avalanche, Ethereum, Optimism, and Polygon networks

18.07.2023 - 08:45


3 min

What’s new? Developers of Chainlink’s decentralized oracle network have launched a cross-chain protocol for interoperability between traditional financial companies and blockchains, both public and private. Chainlink Labs Chief Product Officer Kemal El Moujahid announced that the Cross-Chain Interoperability Protocol (CCIP) is in early access on the Ethereum, Avalanche, Polygon, Arbitrum, and Optimism networks.

Chainlink Blog

CCIP is an interoperability protocol that allows enterprises to transfer data and assets between public and private blockchain ecosystems directly from their internal systems.

What else is known? Developers note that the current Web 3.0 landscape consists of hundreds of blockchains, Layer 2 (L2) networks based on them, sidechains, parachains, and other environments, resulting in fragmentation of applications, assets, and market liquidity across disconnected networks. In addition, existing cross-chain solutions are complex and insecure, and users have already lost over two billion dollars worth of assets due to vulnerabilities. According to the Chainlink team, the lack of interoperability is hindering innovation and mass adoption of Web 3.0.

Developers claim that their proposed CCIP could become an industry standard for blockchain interoperability, tokenization, and cross-chain applications and services because it is simple, reliable, and secure to use. Thus, the use of the protocol will enable the transfer of tokenized assets, collateral, and NFTs, as well as cross-chain liquid staking tokens, gaming, data storage, and computation.

Developers on Ethereum, Avalanche, Polygon, Arbitrum, and Optimism will have access to CCIP on their test networks on July 20. Chainlink’s interoperability solution utilizes the SWIFT financial messaging system.

As Chainlink co-founder and CEO Sergey Nazarov explained, CCIP is designed “to connect the fragmented public blockchain landscape and the growing bank chain ecosystem into a single Internet of Contracts.” He added that a solution that enables interoperability and seamless data transfer between networks will be a critical building block for a blockchain-enabled society.

Institutions in the traditional finance sector such as 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) are participating in testing the Chainlink protocol.

In addition to the five blockchains integrated into CCIP, the AAVE DeFi protocol will implement an interoperability solution, and the Synthetix decentralized derivatives platform is already running on the CCIP mainnet.

The Ethereum-based Chainlink handles verification and data collection from external sources for other smart contracts. As of July 18, the native token LINK is trading on Binance at $7,09, having added 6,15% per day, the capitalization of the asset is $3,65 billion, and it ranks 23rd in the overall ranking of cryptocurrencies.

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