AMA Recap: CRYPTO MINERS X CHAINLINK

Chainlink is a blockchain abstraction layer that enables universally connected smart contracts. Through a decentralized oracle network, Chainlink allows blockchains to securely interact with external data feeds, events and payment methods, providing the critical off-chain information needed by complex smart contracts to become the dominant form of digital agreement. The Chainlink Network is driven by a large open-source community of data providers, node operators, smart contract developers, researchers, security auditors and more. The company focuses on ensuring that decentralized participation is guaranteed for all node operators and users looking to contribute to the network. Chainlink is one of the first networks to allow the integration of off-chain data into smart contracts. With many trusted partners, Chainlink is one of the major players in the data processing field. Due to the integration of off-chain data, Chainlink has attracted the attention of numerous trusted data providers, including Brave New Coin, Alpha Vantage and Huobi. Data providers can sell access to data directly to Chainlink, thus monetizing the information they have. As a decentralized network, Chainlink allows users to become node operators and earn revenue by running critical data infrastructure required for blockchains’ success. Chainlink uses a large collection of node operators to collectively power a wide range of decentralized Price Feed oracle networks live in-production, which currently secure billions in value for leading DeFi applications like Synthetix, Aave, Compound and more.

We hosted an AMA session with ChainLink on 18th November.

▶️ We previously hosted AMA with ChainLink on 20 January, 2022, take a look here: https://link.medium.com/XFqF9WGX0mb

Mr. Ramsy was the host from Crypto Miners and Mr. Marc Romero was the guest. He shared with us the features and advantages of ChainLink.

Ramsy | Crypto Miners:
Hello everyone 👋 Welcome to Our Another #Special AMA session With ChainLink

To help us learn more about ChainLink, We are lucky to be joined by Marc Romero

Marc Romero:
GM CRYPTOMINERS!!!!

Ramsy | Crypto Miners:
Hey Marc 👋

Welcome here

Marc Romero:
Hi everyone. My pleasure to join your community today.

Ramsy | Crypto Miners:
Thanks for bringing Us ChainLink ❤️

Alpha ⚒ @CryptoMiners_co:
Hey gm man! Glad to see you again here!

Marc Romero:
OK;LG

I’m Marc Romero, Community Manager Europe/Latam ChainLink Labs.

Next week it’s my 2nd anniversary at Chainlink!!

Ramsy | Crypto Miners:
Glad to have you again 🤝

Wow That’s Great 🥳

Marc Romero:
It seems that I’m joining blockchain ecosystem all my life.

1 year in Crypto equals 7 years in a typical company

Yes! Of course

Ramsy | Crypto Miners:
Maybe You Can share more about your experience and journey in this field?

Cool

Marc Romero:
Sometimes people think that people that are working in these protocol are like alien. But I could promise you that I’m a normal person.

I studied computer science but, honestly, I hated to code. I’m still hating. Lol

Before to get involved in Blockchain ecosystem, I was running a family business dedicated to construction and rehabilitation of buildings. As you can see not related at all. 🤪

Construction… OH MY GOSH!!

Ramsy | Crypto Miners:
Lol 😅

Marc Romero:
In mid 2018 I’ve found a tweet about a project named Chainlink and I was fascinated for their vision.

Since then, I have been learning from different social media until I applied to become a Chainlink Advocate (like an Ambassador) on February 2020, to help the spread the word for the Hispanic Community.

I could tell people that Cryptominers is a good way to find and learn from good projects.

To finish my intro, after 8 months of hard work as a volunteer, I become full-time team member as a Community Manager @ Chainlink Labs, for the Hispanic and European Communities.

And now I’m managing a team of 4 amazing people in Europe and Latam.

Ramsy | Crypto Miners:
Thanks For the Appriciation ❤️‍🔥

That’s such a wonderful journey i think 👌

Marc Romero:
More interesting things coming!

Ramsy | Crypto Miners:
Now Let’s Start to Talk about ChainLink…

1.Can You Give a brief introduction about ChainLink. What is the Vision Behind ChainLink?

Marc Romero:
Chainlink was created in 2017 by Sergey Nazarov and Steve Ellis, who co-authored a whitepaper introducing the Chainlink protocol.

But they were working for this idea from 2014!!

The same year they network with Ari Juels (Cornell University professor).

Their vision was that Chainlink acts as a “bridge” between a blockchain and off-chain environaments, to solve the oracle problem.

Later I’ll explain briefly what is the oracle problem.

The network is used by smart contracts and was formally launched in 2019 on Ethereum mainnet.

Chainlink published a second white paper in April 2021. That paper, Chainlink 2.0: Next Steps in the Evolution of Decentralized Oracle Networks.

https://chain.link/whitepaper

There is detailed a vision for expanding the role and capabilities of decentralized oracle networks to include hybrid smart contracts, which utilize on-chain code and off-chain services provided by oracle networks.

For a better understanding we should know WHAT IS THE ORACLE PROBLEM. Here we go…

The “ORACLE PROBLEM” is also known as the “smart contract connectivity problem”.

It refers to a blockchain’s inability to natively pull data from or push data to any external off-chain System.

This is due to the strong security properties created by a blockchain’s consensus mechanism.

In order to create a bridge between the blockchain (on-chain) and the outside world (off-chain), there requires an additional and separate piece of infrastructure known as an “oracle”.

For a better comprehensions check this post: https://chain.link/education/blockchain-oracles

And now that we know what is an Oracle, what is Chainlink??????

Chainlink is a decentralized oracle network that provides real-world data to smart contracts on the blockchain.

Ramsy | Crypto Miners:
Yes…

Marc Romero:
We like to thing that Chainlink is “The industry standard
oracle network”

At this moment, Chainlink empowers teams to capitalize on the innovation in the blockchain industry by providing a secure blockchain middleware solution that seamlessly connects an organization’s existing back-end infrastructure to any blockchain network.

As a decentralized oracle network, it greatly expands the capabilities of smart contracts by providing secure access to off-chain data and computation.

There are now 1598 Chainlink integrations and growing day by day.

Companies like: Amazon, Google, Oracle, SwissCom, Intel, Microsoft, Ernst & Young, Associated Press, Accuweather, T-Mobile, Hedera Hashgraph and SWIFT.

You could view Chainlink integrations at: http://chainlinkecosystem.com/ecosystem

Ramsy | Crypto Miners:
Thanks Marc for defining it so well 👍

Now Let’s Explore About ChainLink’s Services

What is Proof of Reserve? Which problems solves Proof Of Reserve?

Marc Romero:
I hope you guys have like 3 more hours to explain all our services. Lol

Briefly I’ll show all our current services and thenI’ll be more focused on PoR.

Ramsy | Crypto Miners:
Haha 😸😹

Cool 👍

Marc Romero:
Chainlink services…

I’ll post here some easy pictures to understand them and then we enter into PoR.

First of them… MARKET & DATA FEEDS

Here we go with VRF (Verifiable Random Function)

More info about this…

Next one…

And finally, still under development…. CCIP

And now I take your question about Proof of Reserve!!!!!!

In a high-level description, Proof of Reserve provides cryptographic truth of any asset’s true collateralization through Chainlink’s decentralized oracle network.

Enables “truth over trust” with highly reliable, highly-secure, real-time monitoring of reserve assets through automated audits for:

a) Off-chain collateral such as fiat-backed stablecoins and tokenized commodities.

b) Cross-chain collateral such as wrapped assets like WBTC

This is a very relevant topic lately due to FTX situation.

Ramsy | Crypto Miners:
Indeed

Marc Romero:
Will you TRUST???? or do you prefer PROOF!!

Ramsy | Crypto Miners:
Always Proof 🌚

Marc Romero:
That’s the attitude.

Ramsy | Crypto Miners:
Now Tell us about Why should ChainLink use Proof of Reserve Algorithm?

Marc Romero:
Bad actors will be excluded from this amazing industry.

First, lets’ talk about the problem Chainlink tries to fix.

Proof of Reserve was created as a solution for a problem that we’ve frequently heard from the top projects, protocols, and companies that we’ve worked with as the industry’s oracle standard. Aave, Compound, Synthetix.

Namely, the “just trust us” guarantees of off-chain and cross-chain assets.

Off-chain-based assets like stablecoins require DeFi users to trust the issuing company to be truthful in reporting their backings. Worse, you have companies like Mt. Gox issuing paper promises to trust their brand. Or most recently with 3 Arrows Capital asking to trust their name and reputation.

We know how both of those ended — loss of user funds and faith in the entire industry.

Cross-chain assets share the same problem. In an increasingly multichain world, bridges have been a constant pain point, netting bad actors over $1B in stolen funds this year alone. The top 3 on rekt’s leaderboard are all bridges. Again, these exploits come from the “just trust us” mentality. For Wormhole the case was trusting that one side was talking to the other. Or with Ronin or the Harmony exploits, trusting that their nodes were secure.

For both of these, you need to ask “who watches the watchmen?”

👀

Who will keep backfilling these funds? Or will users even continue risking it?

All of this can be viewed as an extension of the oracle problem — a problem that’s blocking the growth and adoption of the space. There’s no way to prove off-chain or cross-chain assets due to the disparate systems.

You have to trust the issuer or rely on a slow, antiquated auditing process.

That’s where Chainlink and Proof of Reserve step in.

Ramsy | Crypto Miners:
This question is always relevant, especially now!!

Marc Romero:
Proof of Reserve is a new standard for off-chain and cross-chain assets based on user demand for security and transparency.

From the aforementioned issues, there’s clearly a right way and a wrong way to go about building these systems.

The wrong way is to push flimsy “just trust us” promisesThe right way is to prove it with cryptographic truth. Instead, say “check the chain!”
As someone who integrates Proof of Reserve, you demonstrate that you are crossing the chasm of the old world of probabilistic guarantees to the Web3 world of deterministic guarantees.

This is how you stand out as a trust-minimized application with end-to-end security to pioneer a world powered by truth.

TRUTH > TRUST

Ramsy | Crypto Miners:
So Can You Share About Value and Benefits of Proof of Reserve?

Marc Romero:
Projects that use Chainlink Proof of Reserve benefit from a solution that:

Security — prevents systemic failures such as infinite mint attacks and reduces insolvency risk.
(Think of it like a 2FA for your app/token)

Transparency — Trust-minimized, reliable and immutable audit reports for users.
Not a massive pile of papers to read through. The trail on the chain.

Speed — Don’t wait for off-chain monthly, quarterly, or even yearly audits that are often too late to be useful.
Immediate reaction time with smart contracts

Competitiveness — Issuers & Consumers can stand out from the competition as leaders in the space.

Ramsy | Crypto Miners:
How Does Proof of Reserve works?

Marc Romero:
Let me talk you through how that happens using a simple process flow:

a) Proof of Reserve leverages the same highly reliable and battle-tested Chainlink DON architecture and process that secures billions in DeFi.

b) The DON continuously monitors reserve balances through an API connected to an external adapter.

c) The PoR Feed is then updated based on either a pre-determined deviation threshold or a heartbeat time interval.

d) This allows real-time auditing with fresh data the moment you may need it.

How it works Integrating PoR…

While it’s already an improvement to display your transparency with a Proof of Reserve feed, a more powerful way to harness this technology is to incorporate this into your infrastructure.

In this way, you provide an additional security layer through a defense-in-depth approach.

For Issuers — when you integrate PoR into your minting function, you introduce mint protection that prevents more tokens from being minted than what’s been proven in your reserves.

For consumers — when you integrate PoR into your protocol, you add a circuit breaker that protects your protocol and users by preventing exploits through continuously checking the reserves of a token to ensure it’s fully collateralized.

Ramsy | Crypto Miners:
Currently Which blockchains are PoR supported?

Marc Romero:
Another explanation picture

That’s Proof of Reserve’s superpower — much like how PoR can read any off-chain API, we also have the ability to read any blockchain. PoR has feeds reading from non-EVM chains like Bitcoin, Dogecoin, Filecoin, and Cardano.

On the flip side, PoR has the ability to write to any blockchain we currently support for price feeds, which is at 14 and counting!

🎉

Leveraging the same architecture as our standard price feeds provide users with the flexibility to fit their multichain needs.

More info here: docs.chain.link

Ramsy | Crypto Miners:
So Tell us more about Typical Use Cases Of ChainLink?

Marc Romero:
Proof of Reserve is used by protocols to transparently prove to their users the true amount in their off-chain or cross-chain reserves.

Specifically:

Asset Issuers — Transparency
Provide ongoing security guarantees of solvency and cannot mint more tokens than assets stored in reserves.

DeFi Apps & Developers — Security
Enable circuit breakers to help ensure unexpected activity from issuers does not result in cascading user losses by preventing minting unbacked tokens.

DeFi Participants — Peace of Mind
Boosts confidence in the backing of off-chain or cross-chain tokens, unlocking growth of the DeFi ecosystem.

Better an image than 1000 words…

If you want to learn more about PoR watch this video from our CEO Sergey Nazarov:

Ramsy | Crypto Miners:
📍Check it out Guys

Marc Romero:
Also you’ll find a bunch of info in our YT Channel: https://www.youtube.com/c/chainlink/

Ramsy | Crypto Miners:
Thankyou So Much Marc For your valuable answers and information about Proof of Reserve and ChainLink ❤️‍🔥

Marc Romero:
Thank you very much for inviting me. I appreciate a lot your nice Community.

Hope you learn a little bit more about this.

🥰

Ramsy | Crypto Miners:
Have a nice day Marc 🥂

Thank you again…

Community, If you would like to learn more about ChainLink, here are some useful links for you:

Website: www.chain.link
Twitter: https://twitter.com/chainlink
Telegram: https://t.me/chainlinkofficial
Discord: https://discord.com/invite/aSK4zew
Youtube: https://www.youtube.com/c/chainlink