Co-founder of Chainlink explains how chain link standards reduce the transaction complexity by 90%

Co-founder Sergey Nazarov, Chainlink, recently explained how standards form the basis of all blockchain and defi-transactions. By creating a united framework, the goal of Chainlink is to reduce complexity, to improve reliability and connect Defi to the broader financial system.

Read on to see how these standards transform the future of finance.

How blockchain transactions have evolved

Nazarov starts by noticing that it is whether it is transactions on Dexs, Stablecoin payments, Real-World Asset (RWA) transfers or cryptocurrency transactions, everything in industry comes down to transactions.

In the past, transactions on a single chain were simple and guaranteed according to the standards of that chain. But the scope of transactions has now changed dramatically. Transactions often include multiple block chains and require inputs such as data entry, identity input and even AI inputs.

They need a wider framework that ensures that data is not manipulated, identity and compliance requirements are met, and AI systems are both useful and safe.

How to simplify chain link standards transactions

Sergey Nazarov explains that modern transactions not only include financial conditions, but also technical details. With a single worldwide standard for transactions, such as the chain link set of standards, much of the complexity disappears.

Users no longer have to worry about sending tokens, because both parties work on CCIP, the interoperability protocol of the cross-chain.

Data use also becomes easier, because both parties follow Chainlink’s data standards on value assets. Identity verification is streamlined via CCID and Chainlink identity standards. This results in a dramatic reduction of complexity, up to 75-90%, so that only the final conditions are taken over.

He emphasizes that standards are the key to reduce friction and make global connectivity in finance possible. Chainlink is currently at the forefront of providing these standards.

Chainlink Powers Defi and Tradfi

Chainlink now indicates the majority of Defi and is increasingly being assumed in Tradefi for cross-chain activities, data and other critical smart contract components. In addition, various teams have built up services that they implement in practical ways, such as Chainlink data services, cross-chain services and identity services.

He explained that the participants must first match the technical details of a transaction before the infrastructure is used. Without a standard, even simple transactions become extremely complex and expensive.

This added complexity has been an important barrier that prevents institutions and large capital from entering Defi.

Chainlink -Goals for global financial standards

Nazarov notes that the goal of Chainlink is to create standards that work for more counterparties and larger capital pools, together with infrastructure that reliably implements those standards.

If successful, these standards and services can become the open global standard that flows the next generation of the financial system.

Chainlink has already demonstrated more than 70% of Defi, and now the standards are also assumed in traditional finances.

By setting clear standards, Chainlink makes complex blockchain transactions easier, faster and more reliable.