Chainlink, the industry-standard Web3 services platform, has revealed that the Cross-Chain Interoperability Protocol (CCIP) has entered the Mainnet Early Access phase on the Ethereum, Optimism, Polygon and Avalanche blockchains.
Leading DeFi protocols are adopting CCIP to power cross-chain smart contracts, including Synthetix, which is live on CCIP mainnet, as well as Aave, with BGD Labs now integrating CCIP on mainnet into the protocol. On July 20, CCIP will become available to all developers across five testnets: Arbitrum Goerli, Avalanche Fuji, Ethereum Sepolia, Optimism Goerli, and Polygon Mumbai.
CCIP is said to be the most secure, reliable, and easy-to-use interoperability protocol for building cross-chain applications and services. Not only are developers given the flexibility to build their own cross-chain solutions on top of CCIP using Arbitrary Messaging, but CCIP also provides Simplified Token Transfers – which enables protocols to quickly start transferring tokens across chains using audited token pool contracts they control without writing custom code and in a fraction of the time it would take to build on their own.
Sergey Nazarov, co-founder of Chainlink, said: “DeFi has faced billions of dollars in cross-chain hacks, with developers often having to patch together bridges to build dApps that interact across different blockchains. Chainlink CCIP finally gives developers one platform for building applications that securely operate across any blockchain. Backed by the Chainlink Network’s time-tested infrastructure and novel security approaches, which have enabled over $8 Trillion in Transaction Value, CCIP is a cross-chain solution that banking and DeFi builders both need to 10x the on-chain economy in their respective verticals.”
Synthetix is a DeFi protocol that acts as a liquidity layer for an ecosystem of on-chain derivatives and financial instruments. One of its recent additions, the Synth Teleporter, provides users with a streamlined method for transferring Synth liquidity between chains. This feature operates by burning sUSD (the protocol’s unit of account) on the source chain, then minting an equivalent amount of sUSD on the destination chain.
The Synth Teleporter employs Chainlink CCIP to burn and mint tokens across chains safely and accurately, ensuring security and reliability. This unique burn-and-mint model promotes higher capital efficiency without the need for liquidity pools. In doing so, Synth Teleporters enable Synthetix liquidity to flow toward areas with the highest demand, bypassing constraints associated with traditional token bridges.
“Security is critical when dealing with on-chain assets, which is why we leverage Chainlink CCIP for our cross-chain Synths Teleporter. As one of the first users of Chainlink Data Feeds, we’re thrilled to get first access to CCIP and all the functionality it unlocks for Synthetix,” stated Kain Warwick, founder of Synthetix.
Aave is a lending protocol that allows users to borrow and lend assets on-chain. BGD Labs, a Web3 development initiative, is integrating Chainlink CCIP into the Aave Protocol to future-proof its cross-chain governance system. The continued integration of more chains into CCIP will give AAVE the ability to easily launch itself onto more chains and to conduct key operations like governance through a highly secure solution.
Ernesto Boado, co-founder of BGD Labs, said: “We’re excited to leverage Chainlink CCIP for secure, reliable, and scalable cross-chain communication on the next iteration of the Aave protocol. With seamless integration into the cross-chain governance mechanism, CCIP is set to save valuable developer time that can be better spent enhancing the core features of Aave.”
In addition to CCIP’s adoption by the world’s leading DeFi applications, Swift and over a dozen financial institutions and financial market infrastructure providers have already begun working with CCIP for both messages and token transfers across public and private chains. The initial group participating in the CCIP collaboration is made up of the world’s largest market infrastructures, global banks and largest custodians by AUM, including The Depository Trust and Clearing Corporation (DTCC), Euroclear, Citi, BNY Mellon, BNP Paribas, Lloyds Banking Group, Clearstream, SIX Digital Exchange (SDX), and Australia and New Zealand Banking Group (ANZ). This collaboration aims to both send value between banks and from banks onto public blockchains, effectively laying the groundwork for connecting the global financial system to on-chain financial products (such as AAVE and Synthetix) with a globally accepted interoperability standard.
Nazarov said: “CCIP is solving both sides of the connectivity puzzle by connecting the world’s leading DeFi dApps to any chain and then connecting the world’s leading global banks to any chain. CCIP will be the only connectivity standard that allows value to flow between multi-trillion dollar traditional capital markets systems and the rapidly growing Web3 application ecosystem. Our goal with CCIP is not only to create connectivity within these two critical groups, but to create a way for them to securely and efficiently transact with each other. If we’re successful, I believe that the blockchain industry could see tens of trillions of dollars in market value added to it, via the sending of value from banks into public blockchains.”
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