Chainlink founder says CCIP opens DeFi for business

Chainlink’s Cross Chain Interoperability Protocol, to launch Monday, looks to build better bridges

article-image

Andriiii/Shutterstock modified by Blockworks

share

Chainlink is switching on its Cross Chain Interoperability Protocol (CCIP), Monday, with Synthetix getting early access to its mainnet. A testnet will open up to all developers on Thursday, July 20.

The protocol builds upon Chainlink’s extensive oracle network to differentiate it from competitors, while it looks to capitalize on connections forged along traditional financial rails. 

As blockchains scale — whether layer-2 networks, sidechains or app-specific chains — these networks will need to communicate with each other.

Existing cross-chain solutions — such as bridges, for example — have attempted to tackle the problem of moving data and assets safely, with mixed results

Other interoperability solutions such as light-clients such as IBC, general message passing like Axelar and other hybrid schemes have tried to fill the gaps, and now Chainlink is joining in the effort.

CCIP will first be available on Ethereum, Optimism, Polygon and Avalanche.

How does CCIP work?

In an interview with Blockworks, Chainlink founder and CEO Sergey Nazarov noted that Chainlink will use its oracle networks to enable CCIP.

“One oracle network is responsible for channeling messages and value. The other one is responsible for monitoring and determining if the properties of the transactions going through the first one are risky or not,” Nazarov said.

Developers who are interested in building cross-chain solutions can build their products on top of CCIP through Arbitrary Messaging. 

This means that a smart contract from Chain X will utilize Chainlinks’ messaging router to send messages to Chainlink’s decentralized oracle networks (DONs). These DONs will then securely and privately communicate with the destination chain messaging router, which will validate the information and send it to Chain Y’s smart contract. 

Source: Chainlink

Beyond having basic communication capabilities, CCIP also has complete token transfer capabilities, according to its documentation, which Chainlink says means that developers for token pool smart contracts won’t need to write customized code. 

A separate Active Risk Management (ARM) network aims to detect any malicious cross-chain activity. When found, ARM will automatically pause services and protect user funds.

ARM operates similarly to how banks protect their customers from fraudulent activity, Nazarov explained.

“If you have been sending money to a friend for years, Venmo, PayPal, very quickly approves it, but if you decide to send money to buy a painting from someone in Eastern Europe, they will have questions,” he said. “The fundamental idea is that you can accurately assess risk based on repeat transactions to known parties.”

Targeting traditional finance money

One of the most exciting aspects of introducing CCIP is its potential to link up DeFi with traditional financial institutions, Nazarov explains. 

Swift (Society for Worldwide Interbank Financial Telecommunication) is planning to use CCIP to work with multinational banks across the globe to bring institutional-grade, multibillion-dollar real-world asset tokens into the world of DeFi, Blockworks previously reported.

Among the banks signing on are 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), according to a press release. 

“When those real-world asset tokens become available, they can go over CCIP into the public blockchain world, which will do two things: It’ll grow the total industry size of the entire blockchain industry and it’ll provide diversified collateral,” Nazarov said.


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates (5).png

Research

Outside of stablecoins, the value of tokenized assets sits below $20B, dominated by the following asset classes: private credit, US Treasuries, commodities, institutional alternative funds, stocks, non-US government debt, and corporate bonds. In the coming months, we see the greatest opportunities in the tokenization of illiquid markets, particularly private equity. However, the successful integration of offchain assets into blockchain ecosystems relies heavily on clear and consistent regulatory frameworks, with purpose-built infrastructure to support it.

article-image

Coinbase Asset Management and One River CEO Eric Peters explains why crypto’s not yet focused on fundamentals

article-image

Over the past 24 hours, PumpSwap’s largest liquidity pool by volume contains tokens with the tickers DOGEMOON and ballscoin

article-image

10T Holdings’ Dan Tapiero predicts crypto listings on exchanges are a “mini step” for value moving onchain

article-image

The S&P 500 was mostly flat after a month of losses, and the Nasdaq has been slowly gaining

article-image

Movement Labs is once again at the core of some criticism after it declined to name a market maker offboarded by Binance

article-image

Experts discuss the future of crypto ETFs as Trump puts “money where his mouth is”