Chainlink Unveils Crypto Guardians and Blockchain Anti-Fraud Bridges

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Chainlink, the leading data feed provider for blockchain-based smart contracts, is expanding its services to include decentralized off-chain computing, work done by a network of node operators known as Chainlink Keepers.

Chainlink Labs is also setting up inter-blockchain bridges with a fraud risk monitoring component.

Announced Thursday at Chainlinks’ annual event, SmartCon, Keepers is a kind of service layer for telling smart contracts how and when to behave. The feature is now available on Ethereum and used by Aave, Synthetix, PoolTogether, Barnbridge, Bancor, and Alchemix.

The evolution of decentralized finance (DeFi) is a cross-pollination of chain logic in the form of smart contracts and real-world data that lives outside of the blockchain.

Chainlink allows inputs such as market data for DeFi, random number generators for games or sports scores for prediction markets to be routed in blockchains through decentralized Oracle networks that are maintained by a committee. of Chainlink nodes.

Keep time

The next step, as outlined in the Chainlink white paper, is to offer calculations as well as data entry through the same decentralized network. To illustrate what is meant by computation in this context, Chainlink co-founder Sergey Nazarov chose the simplest use case.

A smart contract cannot know what time it is, Nazarov said in an interview. He has no conception of time. So if you want a smart contract to settle at midnight on Tuesday, you need a Keeper.

One type of calculation commonly used in DeFi applications would be triggering limit orders, or it could be more advanced things like monitoring certain debt pools for under-secured loans. What the project teams are doing right now is building this compute layer internally. But that’s the antithesis of the whole decentralization narrative, Nazarov said.

We have created an end-to-end decentralized application, he said, adding:

It has the decentralization of the code and it has the decentralization of all the systems controlling the code. Because if you get to partial decentralization of the code but not everything is controlling the code, that’s where you can have flash loan attacks and all those other attacks.

Chainlink’s custodians will be selected from the existing pool of reliable node operators in the network, Nazarov said, and the profits they earn will ensure they deliver calculations at any level of congestion or cost scenario. . In the future, more enterprise level gatekeepers will be added to the network, such as Deutsche Telekoms T-Systems.

Missing links

A little further down the Chainlink roadmap, but something the team has been working on for the past two years, is a pair of cross-blockchain bridges. Chainlink’s Programmable Token Bridge is used to move tokens across blockchains; its inter-chain interoperability protocol (CCIP) makes it possible to share calculation commands.

Crypto lender Celsius announced Thursday that it has committed to using CCIP.

Now is the time for that, Nazarov said, pointing to the high-profile THORChain feat of recent months.

When others cross chain [bridges], they have two basic problems, Nazarov said. Either they haven’t designed a secure system, or they don’t have a relationship with other blockchains that will drive adoption of the bridge.

Under the hood, the Chainlinks cross-chain system exploits something like multi-signature security, Nazarov said, but done in a way that effectively aggregates signatures from hundreds of trusted Chainlink nodes.

In addition, a new anti-fraud network will operate alongside the Chainlink cross-chain bridge and monitor every signature, transfer, and addition or reduction of a node, Nazarov explained. The anti-fraud network has the ability to lock the bridge at any time in a completely unilateral manner, he added.

This creates a critical layer of risk management and anti-fraud management, Nazarov said, adding:

If you look at any system in the world that moves value and deals with value, they all have anti-fraud and anti-risk departments. They have huge investments in anti-fraud systems. But for some reason we want to move billions of dollars through all of these bridges without a risk management system. How can this make sense?

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