Celo Incorporates Chainlink’s CCIP Protocol to Boost Cross-chain Interoperability and Unlock Real-World Asset Value
Summary:
Ethereum layer-2 network, Celo, integrates Chainlink's CCIP protocol to enhance cross-chain interoperability. This integration is expected to promote the long-term growth of the Celo ecosystem. Chainlink's CCIP protocol serves as a fundamental protocol for facilitating communication between public blockchains and traditional financial systems. Furthermore, this integration emphasizes the blockchain industry's focus on tokenizing real-world assets, potentially unlocking value in traditionally non-liquid assets like real estate and collectibles. The article also highlights the issues plaguing existing cross-border transactions, including inefficiencies, delays, and high costs.
Celo, an Ethereum layer-2 network, publicized the integration of Chainlink's CCIP protocol for cross-chain interoperability on May 29. Eric Nakagawa, Celo's executive director, remarked that this standard cross-chain infrastructure could potentially spur the Celo ecosystem's enduring growth and acceptance. He underscored the uniqueness of CCIP, being the sole solution assuring level 5 cross-chain safety, and highlighted its suitability for developers, founders, and the broader community to embrace. As the blockchain industry's primary concern remains cross-chain interoperability, tokenizing actual-world assets takes the stage as the anticipated next surge in growth. Chainlink purports that the total value of all realistic-world assets astonishingly reaches $874 trillion. Regrettably, these assets are scattered across a multitude of platforms, sectors, and chains, leading to efficacy and liquidity dilemmas for investors and speculators attempting to leverage value in typically non-liquid assets like real estate and collectibles.
Chainlink's CCIP protocol comes into play here, serving as a base 'layer 0' protocol for facilitating cross-chain interactions among public blockchains and even orthodox financial architecture. A graphical representation illustrates the interrelation between SWIFT and Chainlink's CCIP.
The year 2023 saw Chainlink successfully carrying out a pilot test with SWIFT, the global protocol for interbank communication. The oracle network and interoperability protocol similarly engaged in an experimental examination with the Depository Trust and Clearing Corporation (DTCC) and an array of banking allies, such as JP Morgan and BNY Mellon, to inaugurate actual-world assets on-chain. The trials conducted by Chainlink with both SWIFT and DTCC underscore potential cooperation between blockchain, conventional banks, and global businesses.
Existing cross-border transactions are tedious, expensive, and laced with inefficiencies, populated by a multitude of intermediaries. Payment processing entities, banks, credit card corporations, and data processors all partake in the transaction, each acquiring individual fees and causing delays. The transactions are further slowed down by regulatory compliance, introducing inefficiencies and hefty charges that obstruct the finalization of transactions and inhibit smaller entities from doing international business. Most of the business environment yet employs outdated technology in this digital era, explaining why traditional bank transactions often take days to complete. This also affects straightforward, domestic transactions irrespective of cross-border messaging requirements.
Published At
5/29/2024 8:40:00 PM
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