Zach Rynes Reveals Chainlink's Real Advantage!

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:04):
Hey, folks, we are recording at chain link smart Con
event and joining me is Zach Ryans, who is the
community liaison at chain Link also known as chain link God.
How are you, Zach.

Speaker 2 (00:15):
I'm doing great. Thanks for having me on.

Speaker 1 (00:16):
Yeah, I got to I had to call out your
ex handle because a lot of people know you as
chain link God.

Speaker 2 (00:22):
Yeah, the former frog on Twitter.

Speaker 1 (00:25):
Zach. How did you find your way into crypto?

Speaker 2 (00:28):
Yeah, that's a great question. I think different people have
their different roots into crypto based on, like, you know,
where their background was. I initially got into crypto. I
saw online that you could run a program on your
computer that prints money, and I thought, whoa, that's interesting.
I gotta go figure out what that is. And I
kind of fell down the rabbit hole from like the
GPU mining hobbyist type perspective. So I jumped into bitcoin,

(00:50):
you know, tried to understand why does digital money have value?
And then I looked into like, you know, the coin
market cap list, and I saw that every token was
on ethereum. So I'm like, okay, what's interesting about ethereum?
And I learned about smart contracts, and then I saw
that smart contracts weren't really all that smart they didn't
know anything about the real world. So if you were
going to have some kind of like mortgage on chain,

(01:12):
how does that contract know anything about the house. So
I kind of had this conception of what the oracle
problem was before I really knew to put a name
with it. And then I eventually came across this paper
that someone wrote about like one institutional smart contract would require,
and it was basically saying like, hey, chain link is
like this the infrastructure that's going to make smart contracts
actually useful at scale. Look at all their connections, look

(01:33):
at at the bread the team's background. And from there,
like when I got fully like Link pilled is when
I got like fully Crypto pilled, I'm like, okay, this
is like this is going to be passive, this is
going to be huge. I have to, you know, try
and educate the world the best I'm able to. And
that's how it kind of led to my Twitter account
and me educating and debating and arguing with people on Twitter.
But and it's just kind of snowballed from there, and

(01:54):
so now it's like Crypto's absorbed my life.

Speaker 1 (01:57):
At this point, for sure, you're all in on crypto
uh oh yeah.

Speaker 2 (01:59):
Like mentally, we were talking.

Speaker 1 (02:02):
Right before the recording about the massive adoption chain link
is getting in and what a landmark moment we're seeing
with Swift and DTCC and c CIP and how these
institutions and banks are now looking to leverage chain link.
What what are your thoughts on that adoption?

Speaker 2 (02:19):
Yeah, I think I think it's been fascinating because you know,
very early days chain links product market fit was DeFi
through price feeds, so that enabled the launch of things
like ave and and and you know, different apps of
use chainlink over time to create secure on chain markets.
But DeFi historically has been very insular or circular, and
that you know, it's crypto applications for crypto natives to

(02:40):
leverage and borrow and trade cryptocurrencies, and you know, the
vision of chain link, I think has always been trying
to bridge the traditional off chain world with the on
chain world. And originally that context was like price data,
you know, bring price data onto the blockchain so that
you can enable lending applications and derivatives and these cool
use cases. But I think the end goal was always
to and unlock the ability for traditional institutions to issue

(03:03):
their assets on chain and be able to use it
within the same DeFi style lending derivatives, trading applications. So
you know, in the early days Chainlink, there was like
you know, some preliminary work with with Swift and some
you know the institutions, but it was a very early stage.
But now, you know, at this smart con and over
the past few weeks and months, we've been seeing you know,
institution after institutions saying, hey, we're going to use chain

(03:26):
link for digitalizedet transfer agency, or we're going to use
it for market data, or we're going to do it
for introperability and orchestration. So like chain link itself has
evolved beyond price feeds to becoming this full developer platform,
right and more and more institutions are starting to realize,
you know, they may not know how to integrate with
each blockchain individually, but they can come to chain link
and get all of the productivity to all the blockchains

(03:48):
and create like truly institutional smart contract use cases. And
so I think the the institutions are starting to really
realize if they want to get into the space, they
need something like chain Link.

Speaker 1 (03:58):
Yeah, it's amazing. You know, I was thinking about chain
link and how you have crypto native companies, you have
other blockchain projects they're using chain links features plus trad
fi and you mentioned the orchestrator, right, and it's like
I just thought of like a spider rab like everybody's
plugging into this network and chain links allowing everybody to connect.

Speaker 2 (04:21):
Yeah, I think people like historically their conception of an
oracle and chain link was like, oh, it's just data.
So it's like a sidecar, you know, connected to a
blockchain and just pushes in data. And so people kind
of I think there's this perception that like it doesn't
really play a big role. But to your point, chanlik
is like a facilitator or like a Connector's like, you
have this traditional finance economy and then you have this

(04:41):
on chain ecosystem of builders and devs, and Chanlick's just
the conduit that's connecting those two by providing the infrastructure
that spans all the blockchains and all the existing systems
so that you know, builders can create applications, institutions can
tokenize and issue assets, and then they can seamlessly interrupt
through through the infrastructure that chainlinks providing. So it's really
just about creating this cirguy calls it like a global

(05:02):
internet of contracts, but like this inparable ecosystem where DeFi
and tradfi just become finance at the end of the day.

Speaker 1 (05:09):
Oh yeah, yeah, And we're seeing this incredible convergence of
trad FI and DeFi in the crypto world, and eventually
they're going to be so together. It's going to be
you won't even know the difference necessarily because it's gonna
be infrastructure is going to be in the piping is
going to be running behind the scenes, and the end
user rightfully, so they don't need to know, but it
just that it works, right yeah.

Speaker 2 (05:31):
I think a lot of people they interact with blockchains directly,
or like crypto natives interact with blockchains directly. But I
think retail users, they retail users aren't going to know
what blockchain they're using at the end of the day,
right just that in the same way that people who
watch Netflix or Hulu they don't know what cloud service
any of those applications are running on, and they don't
really care, right yeah. And so I think chain like

(05:53):
is always operated behind the scenes where it's going to
provide this critical piping and critical infrastructure, but the end
you doesn't ever actually have to know that chain link exists,
but it enables the applications that end users end up
interacting with, whether it's payments or you know, new financial
on chain markets that can be represented through the existing
applications and brokers's accounts that people already use. So it's

(06:15):
really just about upgrading the back end system that these
apps use. Yeah.

Speaker 1 (06:19):
Absolutely. What are your thoughts on chain link setting up
the reserve chain link reserve and what's the goal of that.

Speaker 2 (06:27):
Yeah, So I think the reserve is really about driving
long term sustainability for the chain, the ecosystem. So the
reserve is this on chain strategic reserve of link tokens
that on chain and off chain revenue is used to
convert to link and then stored on chain for you know,
to support the ecosystem's growth over the long term. So
I think that the main thing that the reserve kind

(06:48):
of signals is that as the adoption of the chain
lik network accelerates and there's more revenue created through off
chain deals with enterprises or on chain service usage, but
that value ultimately gets redirected into the link. I think
there's a lot of projects in crypto where the question
of what actually accrues value can be a little bit
confusing or a little bit murky, And yeah, there's different
intentions from different projects. But I think with chain, like

(07:09):
you know, the reserve really makes it clear that you know,
the link token is at the center of the chain
like ecosystem. Right as the network network effects accelerate, more
institutions come un chain. There's more builders than all that
creates this flywhee effect with the link token that just
accelerates long term growth and sustainability. So I think that
that that's the main impact that I see with the reserve.

Speaker 1 (07:28):
If I'm not mistaken, chainlink is the only one doing
that right because I haven't seen any other projects do to.
And I think that's a model that more projects that
do you know, in openness and transparency and showing kind
of the like you said, the crual of value, but
it's more community focused, right because you have that transparency
versus it's it's locked up in a foundation, no one

(07:48):
knows what's happening, that type of thing.

Speaker 2 (07:50):
Yeah, we've seen more projects doing these type of like
buyback model. Hyper Liquid is an interesting case study of
like you know, their derivatives, exchange volume builds up this
assistance fund. And I think what's novel about chain Looks
approach is that it's taking not just the on chain
revenue that people you know can see on chain through
stable coin payments or native link payments, but it's also
the off chain deal revenue. So that's like with with

(08:10):
different blockchains via the scale program and other initiatives that
historically projects you don't really see that revenue, and a
lot of it's like you know, traditional legal agreements. Like
the example I use is that if a bank or
enterprise comes to chain link and says like, hey, I
want to use your Oracle services. I need Oracle networks,
but for whatever business or legal reasons, I can't touch crypto,
I can't touch the link token. I can pay in dollars,

(08:33):
and like, is the chain liok team supposed to say, like, no,
your money's not good here, go away, Like no, They're
going to accept that revenue and then use infrastructure to
convert that into the link token and pag it back
into the ecosystem, abstracting away that whole process away from
the institutions. And so I think that this kind of
a channel calls it payment abstraction. I think this is
one of the first case studies, or one of the

(08:55):
first examples that people in crypto are going to be
able to pay for any service with any form of value,
and then it's really up to the protocols to determine
what to do with that value that comes in. So
in the case of chandlink, that's converting into link and
putting it into a strategic reserve. I think other ecosystems are
going to have to consider that. You know, when everyone's
paying for blockchain transaction fees and stable coins, what does
that mean for all the gas tokens, Like that's just

(09:18):
gonna have to be a question that other projects are
going to have to answer.

Speaker 1 (09:21):
Yeah, yeah, well, put what are you most excited about
for a chain link next year? And even the crypto
market in general, because we've got like the market Structure
bill coming up and that could have a big impact
on the industry.

Speaker 2 (09:32):
Yeah, I mean the market structurability. If the Clarity Act
you can get past that year this year, that would
be fantastic. I think that would create the clarity that
the industry has been asking for for very very long time.

Speaker 1 (09:41):
Now.

Speaker 2 (09:42):
At this point, what I'm what I'm personally excited by
is the one of the products that Chanlink announced here
it's Marcon, was the Chanlik run Time Environments, which is
this developer platform where people can come to the chan
platform right one piece of code, their workflow code, and
automatically orchest straight an institutional style smart contract that spans

(10:03):
any on chain system, any off chain system, swift network,
any external API, and orchestrade a really complex mark contract
application within the chaining platform itself. So like historically developers
would come to a blockchain, they would choose a blockchain,
deploy their application, and then come in and choose their
oracle as like an after the fact type process. And
I think where things are moving is that more and

(10:25):
more developers will first choose their oracle platform, write the
core logic of their application. That logic will run off
chain in an oracle network, and then you connect to
a blockchain for like final settlement and moving tokens around.
So I think where developers are going to build their
applications is going to shift from choosing a blockchain to
choosing an oracle platform that then kind of plugs into
blockchains after the fact, and you can you can choose

(10:47):
it in a very modular manner. So I think that
that's going to open up a whole lot of institutional
style smart contracts, and then there's a whole lot of
institutions coming in and choosing chain like and building on
this runtime environment to kind of show the power of
it and create these reusable workflow code that can be
replicated by other people in a similar way that you know,
EARC and smart contracts have been historically.

Speaker 1 (11:09):
You mentioned institutions. We're seeing just incredible adoption from the
likes of black Rock and firms of that caliber, plus banks,
you know, looking to launch stable coins, custody trading, et aps,
and much more. What are your thoughts on how trad
fi they are. You know, one point they were against
this and they were saying, we're going to build our
own private permission blockchain. Now they recognize public blockchains is

(11:32):
the way to go. What are your thoughts on how
they've been coming into the market and building.

Speaker 2 (11:37):
Yeah, I think there's been two complementary but two very
different routes that they've taken. I think one is the
trad fi serving crypto audiences, and so that is basically
all the ETFs being launched, so sure, black Rocks Ibid is,
you know, the most successful ETF launch ever. B Soul
was launched just a few i think last week and
that was like the fastest growing ETF launch of this year.

(11:58):
So like there's clearly a lot of demand for crypto
exposure within an ETF type format. So you can you know,
buy crypto and a brokerage account, and you can have
a retirement fund. Like there's a lot of benefits. So
I think TRATFI is realized. You know, there's a whole
audience people who want to gain exposure to crypto as
a new asset class, and they already have the legal
wrappers in the form of an ETF that have become

(12:19):
very popular over the past ten twenty years. And so
that's like a new source of revenue for institutions. And
then there's the other angle, which is institutions starting to
bring their existing assets on chain and provide that to
the crypto natives. And so that's like black Rock and
their build a tokenized money market fund, and Fidelities has
a money market fund, and the UBS just recently launched

(12:40):
their tokenized money market fund together with chain Link, using
the chain platform for subscription and settlement, so you can
subscribe to a tokenized fund using existing Swift off chain
fiat payments, so kind of bridging these two worlds. So
I think the main advantage is there is global distribution
anyone can access these as it's across the world, and

(13:01):
the programmability, the collateral mobility where you can deposit these
assets within DeFi contracts, use them as collateral or stable
coins against it, and you can move these assets for
less than a penny in under a second. So just
the under underlying efficiencies that tokenized assets bring. So it's
really this two pronged approach of providing access to crypto
as like a new asset class, as well as using

(13:21):
the underlying rails of crypto to issue your own assets
as a complementary approach to the natively issued cryptocurrencies.

Speaker 1 (13:29):
Right, man, it's a brave new world. What all these
things that are being built and innovated. And I'm curious
to see what the market is like in twenty thirty,
not from a price standpoint, but just adoption and seeing
some of these things running through the economy and the
markets and people across the globe can access them and
leverage them like stable coins and tokenized assets. People who

(13:49):
couldn't access some of these, like stuff on the New
York Stock Exchange in a tokenized format, can maybe access
it in countries in Africa, Latin America and much more.

Speaker 2 (13:57):
Yeah, I think stable coins are like the primary best
example of that of the ability to transfer a stable
unit of value between any address anyone in the world
at any time twenty four to seven for basically nothing
like that's that is a very liberating thing. I think
some people in the West, like they don't necessarily realize
the power of that because like the US has a

(14:18):
fairly decent financial system when it when it doesn't break.
But if you're in a country with a uncertain legal
system or a shaky banking system, you know, getting access
to a stable currency like the dollar when your local
feat currency is inflating at ten twenty thirty one hundred
percent inflation per year, like you want access to dollars,
but in the traditional system, they either don't offer it,

(14:38):
or it has like a fake exchange rate, or they
confiscate or they you know, there's all these like tactics
that you know that could be done by more authoritarian regimes.
But if you have a stable coin, nobody can prevent
you from accessing stable coins, you know, and they're digitally native,
so they are very easily imported into different countries. So
I think stable coins will grow in adoption massively. And

(14:59):
this current US administration is very very pro stable coin,
both from like the dollarization of other countries as well
as you know, this is a new purchaser of US treasury,
so you know, if there's a trillion dollars of stable coins,
as a trillion dollars of US treasuries within stable coins,
which is good for funding the despot deficit for the
US government. So like stable coins are very beneficial, very

(15:22):
aligned to the US government. It's very beneficial to institutions
who want to provide new financial products and want to
undercut the incumbents, and for everyone around the world, it's
just a way to access a dollar in a more
superior format. So I think stable coin, in my opinion,
is like the trojan horse of people starting to understand
the value proposition of tokenization as a concept and smart

(15:44):
contracts as a technology. So like, once you experience the
benefits of a stable coin, you're gonna want that for
every asset, Like why can't I trade stocks twenty four
to seven over the weekend. Why does it take you know,
a week if I want to transfer assets around between
different accounts, like it should just be instant. So I
think people will come to expect the benefits of stable
coins for every type of asset and every financial interaction

(16:05):
that they have.

Speaker 1 (16:06):
Yeah, and they're putting so many things on the blockchain,
you know, stocks, equities, precious metals, and eventually real estate.
So maybe I don't know if this is a bit off,
but eventually individuals can start tokenizing things that are rare,
of course, and if there's a market for it, you know,
I have liquidity around it, and I could open up
a lot of opportunities for people.

Speaker 2 (16:26):
Yeah, I think we've we've historically. What people are kind
of focused on is like if we can take existing
assets and tokenize them. But when you have like a
tokenization toolkit, and you have the global accessibility and the programmability,
you can create entirely new types of asset classes that
are kind of hard to imagine, you know, like tokenizing
someone's time so you can kind of have a new

(16:46):
way of issuing salaries to people like that. It's hard
to imagine new use cases in the same way that
it was hard to imagine all of the possible use
cases of the Internet in like the early nineties, right,
Like you can kind of imagine some of the use cases,
but if you think it email, that was like a
very simple basic use case, and so think if stiblecoins
today is very exciting use case of blockchains. But it's
also like the email use case of blockchains, just moving

(17:08):
tokens around. So like, when we have this tokenization toolkit,
there's gonna be a whole new set of assets that
we can't even imagine today that are going to be
issued and circulated around the economy.

Speaker 1 (17:18):
Yeah, for sure, Zach, great stuff, my friend, and thank
you so much for joining me, and I'm going to
continue to engage with you on x as we talk
about link and much more. But you know, appreciate your time.

Speaker 2 (17:32):
Thanks for having me on.

Speaker 1 (17:33):
This episode is brought to you by v Chain. V
chain is one of the top Layer one enterprise blockchains
indie crypto asset class and they are getting adoption by
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(17:55):
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(18:18):
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