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Chainlink 2.0: The mass adoption of hybrid smart contracts

Chainlink has released a new whitepaper called Chainlink 2.0: Next Steps in the Evolution of Decentralized Oracle Networks. The new whitepaper outlines an ambitious vision for the future of smart contracts.

Chainlink has released a new whitepaper called Chainlink 2.0: Next Steps in the Evolution of Decentralized Oracle Networks. The new whitepaper outlines a long-term, multi-year vision for the future of oracle-enabled smart contracts. The paper states that “Decentralized Oracle Networks will create a decentralized metalayer that enhances smart contracts with highly scalable, confidential, and secure forms of off-chain computation, in addition to the external data feeds that Chainlink powers today.”

The Chainlink 2.0 Whitepaper is over 100 pages long and represents a year of work by the Chainlink team. It was written by a team of academic researchers from computer science fields such as security, cryptography, distributed systems, game theory, and mathematics. The team is headed by Ari Juels, Chief Scientist of Chainlink Labs, with contributions from Lorenz Breidenbach, Christian Cachin, Benedict Chan, Alex Coventry, Steve Ellis, Farinaz Koushanfar, Andrew Miller, Brendan Magauran, Daniel Moroz, Sergey Nazarov, Alexandru Topliceanu, Florian Tramèr, and Fan Zhang.

The paper outlines a new architecture for building hybrid smart contracts where Decentralized Oracle Networks offer all of the capabilities that blockchains cannot, serving as an off-chain computation layer that is anchored to blockchains for security while operating with the feature-richness and scalability of off-chain systems. The new layer enables a product suite of Chainlink Decentralized Services that power a variety of secure, smart contract applications capable of supporting a wider set of use cases than is currently available today.

Secure off-chain computation powered by Chainlink Decentralized Oracle Networks

Next-generation decentralized oracle solutions

The Chainlink team pioneered the concept of a single decentralized oracle network. These are used as a way to provide external data to a blockchain-based smart contract. Over the last three years, Chainlink has evolved into the most widely used decentralized oracle solution. Its oracles are used across the smart contract ecosystem including in DeFi, insurance, gaming, and NFTs. As a result, Chainlink secures billions in on-chain value.

Chainlink 2.0 represents a new model of multiple interoperating Decentralized Oracle Networks (DONs). The whitepaper says that these “consist of a collection of nodes that can transfer data bidirectionally and perform decentralized off-chain computation using various consensus protocols. Similar to layer-2 technology, Chainlink DONs are anchored to existing blockchains in order to periodically sync the data outputs and state changes computed off-chain, as well as establish guardrails that enforce correct oracle reports and arbitrate off-chain oracle disputes.”

Chainlink Decentralized Services

Chainlink says that this evolution into off-chain computation allows DONs to provide a universal gateway for smart contracts to not only access any off-chain resource but also an off-chain computing environment for code execution that either cannot be performed on a blockchain or is not feasible to do on-chain.

Chainlink serves as a secure and flexible full-stack solution for the creation of hybrid smart contracts that operate both on-chain and off-chain simultaneously, without compromising on decentralization or accessibility. Chainlink says decentralized applications will achieve significant gains in scalability and confidentiality with hybrid smart contracts, allowing faster adoption of smart contract use.

New use cases

Chainlink says that advances enabled by its decentralized oracle networks will unlock next-generation smart contract use cases. The oracle services that the Chainlink Network provides today will be further enhanced through these advances. These include:

Hybrid Smart Contracts that are seamlessly connected to all necessary off-chain resources, while retaining increased levels of privacy and being secured by your preferred blockchain or layer 2.

Chainlink Data Feeds that provide higher-frequency updates, privacy-preserving queries, and multi-blockchain delivery, all of which lower costs and empower DeFi applications like high-leverage derivatives protocols and enterprise solutions with an even more secure and reliable source of external data. Chainlink Data Feeds are already being made more scalable through OCR.

Chainlink VRF with enhanced security, crypto-economic security, and cost-efficiency to support more secure gaming, NFT minting, and any other applications that require a secure source of randomness for end-to-end security.

Chainlink Keepers that provide decentralized and highly reliable automated maintenance of key smart contract functions like harvesting yield and triggering liquidations, currently being primed for production and tested by top projects.

Chainlink Fair Sequencing Services (FSS) that use DONs to order user transactions on a blockchain as a means of mitigating front-running, back-running, and other related attacks, as well as other types of transactions like oracle report transmission caused by miner-extractable value (MEV).

Chainlink Decentralized Identity in which privacy-preserving oracle protocols interoperate with existing systems in a backward-compatible manner to open up new use cases like on-chain credit-based lending.

Chainlink says that its vision for the Chainlink 2.0 Network will be implemented incrementally with new decentralized services being released in parallel, so researchers can formally analyze the security of its new oracle functionalities before release.


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