Coming July 20, 2023, Chainlink will take CCIP live. The news was announced by Chainlink, citing that Cross-Chain Interoperability Protocol is all set to be integrated with reputed DeFi Protocol partners. It is expected to be backed by five testnets. These include Avalanche Fuji, Polygon Mumbai, Ethereum Sepolia, Optimism Goerli, and Arbitrum Goerli. DeFi Protocols like Synthetix and Aave have expressed their interest in the venture.
The entire idea is based on the fact that Web3, the upcoming decentralized internet, is seeking the implementation of a multi-chain landscape. A lot is yet to be explored in Web3; however, the assumption could be correct. Launching the new project brings more innovation and adoption among the community. Being backed by Synthetix and Aave only makes the bid stronger for Chianlink’s CCIP.
Synthetix majorly deals in on-chain derivatives and financial instruments as a liquidity layer. Synth Teleporter, the recent addition to Synthetix V3, is planning to employ CCIP for the purpose of burning and minting tokens. This is expected to introduce security, reliability, and accuracy. Interestingly, it will no longer require liquidity pools.
Kain Warwick, the Founder of Synthetix, has highlighted that they decided to employ CCIP since security is a major concern for a team at a time when they are working with on-chan assets. Kain has added that they are thrilled to be testing the mechanism, especially as one of the first users.
Chainlink is unlocking a set of functionalities for its partners – Synthetix included. Something similar can be said for Aave as it comes forward to give CCIP the best shot.
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Exploration by Aave in the field of chain-native bridges is not something new. It has tried joining hands with a lot of partners. Things could go seamlessly with CCIP for select reasons:-
- Scalability to new networks
- Gas-efficiency design
- Ease of integration
- Time-tested infrastructure
Aave Governance V3 will integrate CCIP with the assistance of BGD Labs. Ernesto Boado, the Co-Founder of BGD Labs, has expressed confidence in CCIP, saying that the integration will save a lot of time for developers, adding that the saved time will then be spent on enhancing core features of the ecosystem.
Ernesto has also expressed excitement on behalf of the venture while acknowledging that CCIP is a reliable, secure, and scalable solution for cross-chain offerings.
Capital Markets have begun exploring the possibilities of integrating CCIP into their respective protocols. It serves as a blockchain abstraction layer, allowing enterprises to connect with the blockchain environment irrespective of its operational status – private or public. Also, it boosts interoperability within the ecosystem.
Entities to have entered into interoperability collaboration are:-
- Australia and New Zealand Banking Group
- SIX Digital Exchange
- BNY Mellon
- The Depository Trust & Clearing Corporation
- BNB Paribas
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CCIP comes loaded with notable features including, but not limited to, simplified token transfers, programmable token transfers, active risk management network, rate limits, smart execution, time-locked upgradability, and payment model.
