Chainlink will Connect ALL of Crypto & TradFi with Sergey Nazarov

**Tony Edward** (0:00)
Hey folks, we're recording at Chainlink's SmartCon event, and joining me is Sergey Nazarov, co-founder of Chainlink. Sergey, great to have you.

**Sergey Nazarov** (0:07)
Great to be here, thank you for having me.

**Tony Edward** (0:09)
Sergey, lots happening with Chainlink. I'm excited to dive into some of the latest and greatest, but I'm curious, what was the genesis, the idea behind starting Chainlink?

**Sergey Nazarov** (0:19)
So we were building some of the first smart contracts before even the Ethereum white paper or yellow paper. We noticed even back then that the most useful smart contracts were not about tokenization, they were about events in the real world being synchronized with smart contract conditions on Chain. We had all kinds of smart contracts back then for trade, global trade, all kinds of things. We didn't really understand back then how big tokenization was going to be was also an issue. It wasn't clear then that that was like the killer use case of blockchains. Sure. So what happened is that as tokenization became the killer use case of blockchains over, let's say, the last seven, eight years, you basically had an environment evolve around tokenization of cryptocurrencies, meme coins, NFTs, all these things. Then you had DeFi up here. Then DeFi was really the first place, was the first type of contract that required an external data source.
We really just hopped on that to an extreme degree, which is why Chainlink grew the DeFi industry from sub 100 million to hundreds of billions now, and currently powers approximately 70% of it globally, and over 80% of it on top chains like Ethereum.

**Tony Edward** (1:43)
You've seen incredible growth. Sergey, I'm blown away that crypto native firms, other blockchain projects could be considered your competitors, and Treadfire integrating Chainlink's services and products, which is amazing. Are you blown away by the success?

**Sergey Nazarov** (1:58)
Yeah. I'm pretty excited about our position in the DeFi community, and we're doing everything we can to support DeFi in many ways, technically in DC, in all kinds of ways. Now what we're seeing is the institutional world start to go on-chain, and institutional world has more and more of those off-chain data problems, bridging between-chain problems, identity problems. There's actually way more of those problems to be solved for the institutions. So Chainlink, I would say, is even more critical to institutional success than it was to DeFi success, because there's multiple problems that need to be solved by Chainlink for a transaction to work at all. Then the exciting thing that I'm really looking forward to is the world where DeFi, which is already on the Chainlink standard, and the institutional smart contract world, getting on the Chainlink standard, and then that will make it very easy and seamless for these two groups to interoperate with each other. So then the capital and the client base of the institutional world, will be able to very easily use DeFi, which will massively benefit DeFi and massively benefit our industry, because it will prove the value of our industry.

**Tony Edward** (3:09)
On that note, I read just recently the FTSE Russell, they are using Chainlink to bring the Russell 1000 and the other index data on chain. That's pretty incredible. So you have stock exchanges and indices and so forth, using Chainlink's technology. That's really great.

**Sergey Nazarov** (3:24)
Yeah, just in the last few months, we've had S&P put their data on chain with Chainlink, using something called Datalink, which is an oracle specifically made for institutions that want to put their data on chain themselves. So S&P, which is the leading provider of risk and scoring of all kinds of all assets really, puts you Russell, TradeWeb and Deutsche Boards. That's just in the last few months.
I think that's a clear signal, and it's because of old institutional demand for that data. So we've been speaking with all of these institutional data providers for many years, well over five years, and way beyond five years, depending on the provider. What we've always found is that they were always unconvinced of the amount of institutional demand for their data going on chain. But as you can see, now they're putting the data on chain very actively. I was on a panel yesterday with a guy from Standard & Poor's, where he said the initial data he put on chain with us was just the beginning, and there's plans to put more data on chain from Standard & Poor's. At the end of the day, I think Chainlink will be the key orchestration and data and connectivity layer between all of these key inputs into contracts, enabling the contracts to work, and all this institutional data is just one of those inputs. But the fact that the providers have assessed the market, and they see it as big enough to put their data on chain, I think is an interesting signal that the market is there.