1/ 🧵🧵THREAD🧵🧵
A bulleted summary of @_dshap 's "The Endgame: A Thesis on the Future of Chainlink and Web 3.0" using AI:
I take no credit for the content of this information and @_dshap deserves your follow.
#Chainlink
#LINK
#CCIP
$LINK
A bulleted summary of @_dshap 's "The Endgame: A Thesis on the Future of Chainlink and Web 3.0" using AI:
I take no credit for the content of this information and @_dshap deserves your follow.
#Chainlink
#LINK
#CCIP
$LINK
2/ -CCIP will unlock the full potential of the Blockchain Economy by combining the network effects, TVL, usage, and utility of every chain accessible to developers through a single abstraction layer.
3/ -Chainlink has achieved complete market dominance for its current products, and institutional adoption will further drive market dominance.
4/ -Secure cross-chain interoperability is highly synergistic with modularized blockchain infrastructure, making it the most secure and cost-efficient architecture for Web 3.0
5/ -Chainlink is a modular, blockchain-agnostic platform that is already integrated with over 1400 protocols for price feeds and off-chain computation.
6/ -Cross-chain messaging is similar to Chainlink's existing services, and the security provided by Chainlink is highly applicable to cross-chain interoperability.
7/ -Chainlink has a significant lead over competitors in the oracle space, with a growing monopoly on the market, securing 92% of oracle Total Value Secured (TVS) by the end of 2022.
8/ -Chainlink has a growing monopoly in the oracle space, and is likely to further strengthen its position through its partnership with SWIFT.
9/ -SWIFT wants to continue working with Chainlink because of the increasing interest from institutional investors in digital assets, and because it allows for access to these assets through existing infrastructure.
10/ -Critics argue that crypto will replace SWIFT and that this infrastructure will be worthless within a decade, but the author of this thesis disagrees, suggesting that there must be a way for existing financial institutions to access DeFi without going through centralized…
11/ …solutions.
-The Chainlink Network is an open-source, permissionless network that aims to move trillions of dollars of value into decentralized finance (DeFi) without the need for third-party intermediaries.
-The Chainlink Network is an open-source, permissionless network that aims to move trillions of dollars of value into decentralized finance (DeFi) without the need for third-party intermediaries.
12/ -Chainlink is partnered with over 100 blockchains, over 1000 projects, and financial institutions through SWIFT, and aims to be a credible, neutral intermediary that allows users to benefit from a single standard that produces the lowest costs and ensures fairness for all…
13/ …network participants.
14/ -The partnership with SWIFT, who has a history of decentralized governance and standard-setting, is an indication of Chainlink's goal to establish itself as a neutral piece of infrastructure for the financial industry, and the potential for trillions of dollars to flow from…
15/ …financial institutions into DeFi protocols in the future.
-CCIP has potential to connect banks to existing systems, increase interoperability, reduce capital buffers and access DeFi money markets with reduced counterparty risk.
-CCIP has potential to connect banks to existing systems, increase interoperability, reduce capital buffers and access DeFi money markets with reduced counterparty risk.
16/ -Major players in global financial system are exploring CCIP through proof of concepts, suggesting it could become the global standard, including extending business relationships to Chainlink via SWIFT-CCIP proof of concept.
17/ -Chainlink appears to mirror Google's strategy by having a little bit of Chainlink in every service, the network token are both money and information which can be captured ultimately enabling a new suite of applications that are powered by this data.
18/ -Monolithic systems are large, all-in-one software systems that contain all the functionality for a specific application or service within a single codebase. They are typically difficult to modify or update without disrupting the entire system.
19/ In contrast, microservices-based architecture breaks down a system into smaller, independent components that can be developed, deployed, and scaled separately.
20/ -Chainlink is betting on a shift from monolithic systems to microservices-based architecture in Web 3.0, similar to Web 2.0
21/ -Chainlink aims to provide every service smart contracts require, except for those provided by blockchains, which allows them to capture and index data associated with the execution of hybrid smart contracts
22/ -Chainlink is addressing barriers to mass adoption, such as identity/privacy and fair sequencing, which allows them to capture massive fee potential.
-Cryptocurrency is not the only use case for blockchain technology, other uses include smart contracts and oracles.
-Cryptocurrency is not the only use case for blockchain technology, other uses include smart contracts and oracles.
23/ -Tokenization allows for the digital proof of ownership without a third-party intermediary, and can represent anything, not just money.
-Tokenization can enable real-time situational awareness and has significant implications for the financial system.
-Tokenization can enable real-time situational awareness and has significant implications for the financial system.
24/ -Transactions begin with a user interacting with an application, whether that is a legacy bank app or a crypto native dApp. These transactions are routed to a blockchain through a CCIP oracle network.
25/ -All transactions are permanently recorded on whatever blockchain the transaction occurred on and is publicly accessible. However, most financial transaction data from large institutions will be private and not accessible through block explorers.
26/ -Chainlink has the potential to "index" Web 3.0 due to its large surface area with respect to the "global" economic history tree. The value of this data is propagated to the LINK token, as the tokenomics of the network align incentives among all participants with the network.
27/ -Google was able to create successful business models by generating data from their products and using traditional web 2 techniques to monetize it.
28/ -Chainlink, by providing all the necessary services for smart contract adoption and routing information through every economic transaction via CCIP, will be in a unique position to capture and index almost all public and private data in the blockchain ecosystem.
29/ -This enables the development of new applications that were previously not possible, such as distributed analytics over decentralized systems, and future AI platforms will require data to retrain and improve their models.
30/ Chainlink is uniquely positioned to provide this data, which can be used to create new products and services.
31/ -In a modular Web 3.0 architecture, middleware, specifically Chainlink, has the potential to capture value in both a 'fat protocol' or 'fat application' scenario, and network-based tokens are expected to outperform other investments over the next decade.
32/ -The "Fat Protocol Thesis" was coined by Joel Monegro in 2016, stating that the protocol layer will capture the majority of value in Web 3.0, which has been supported by the high valuations of Ethereum and other Layer 1s.
33/ -Recent data from top dApps in late 2021 showed signs of cracking in the Fat Protocol Thesis, as various protocols generated more fees than Layer 1 blockchains, leading to the emergence of the "Fat App Thesis" which argues that users are willing to pay non-zero fees for the…
34/ …unique value provided by top applications.
35/ -The "Fat Middleware Thesis" suggests that regardless of which apps or protocols capture significant value, middleware services such as Chainlink will also capture value as they are necessary for both apps and protocols to function.
36/ It is possible that Chainlink will capture more value than any other protocol or application due to its monopoly on this part of the stack and its ability to collect more data than any other individual application or blockchain.
37/ -The design of a cryptoeconomic network is crucial for its success and the key to making its token essential for its operation is linking the growth of the network to the demand for the token.
38/ -The value of a network will increase directly with demand because the token itself is needed to pay for network services, which is a new way of tying compensation and incentives to network scale.
39/ -The unique characteristics of tokens, such as their digitally programmable scarcity, makes them unlike any other asset in human history, and the deflationary dynamics of the Chainlink token are even stronger than those of Ethereum due to the way that the total value of…
40/ …staked tokens scales with Total Value Enabled.
-Schmidt advises taking a measured approach to regulation and allowing systems to be built before fully understanding their potential consequences.
-Schmidt advises taking a measured approach to regulation and allowing systems to be built before fully understanding their potential consequences.
41/ -The FTX incident serves as a reminder of the need for trust-minimized infrastructure in the form of DeFi, which relies on cryptographic truth rather than trusting the promises of centralized institutions.
42/ -Chainlink's Proof of Reserves is an example of the type of technology that is necessary for a fair and transparent economic future.
-The distribution of wealth in society follows power laws and true decentralization may not be beneficial for society as a whole.
-The distribution of wealth in society follows power laws and true decentralization may not be beneficial for society as a whole.
43/ Economic and technical incentives can lead to centralization in certain systems, such as Bitcoin and Ethereum.
-Ethereum's move to Proof of Stake can help address decentralization issues, but other challenges such as centralization of network nodes still exist.
-Ethereum's move to Proof of Stake can help address decentralization issues, but other challenges such as centralization of network nodes still exist.
44/ -AI has grown exponentially in recent years due to the development of transformer models and the advancement of GPU-based architectures.
AI has generative capabilities such as Diffusion models used in DALL-E, OpenAI's image generation model, or ChatGPT.
AI has generative capabilities such as Diffusion models used in DALL-E, OpenAI's image generation model, or ChatGPT.
45/ -These models are powerful and easily composable, leading to an explosion in business productivity and use cases.
46/ Experts such as Henry Kissinger and Eric Schmidt argue that we are entering a new age due to AI's incomprehensible capabilities, and that strong general AI is likely to be built before the end of the decade.
47/ -Privacy is a core issue when it comes to discussing blockchains, as all transactions are recorded on a ledger that is accessible globally.
48/ However, users typically access cryptocurrencies through centralized platforms that require KYC/AML checks, which could compromise their privacy.
49/ -Trust-minimized, algorithmic systems are becoming cheaper than human-intermediary based systems, and this trend is likely to continue.
50/ -Chainlink is a network that has the potential to become the core piece of infrastructure for this shift, as it provides a generalized truth machine that can generate consensus on any arbitrary piece of information or computation.
51/ -The Chainlink network is generating more data than any other piece of infrastructure that makes up the Web 3.0 stack, and this data will be extremely valuable to new global network platforms that will leverage it to train powerful AI models.
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