Connect To All Blockchain Environments Through A Single Chainlink Integration
The Internet acts as a single integration gateway between disparate systems. Once “Internet-connected”, a computer can share data with any other Internet-connected computer. In this article, we outline how Chainlink’s open-source, decentralized oracle network creates a single integration middleware for users to get their systems “blockchain-enabled” across all blockchain environments. Enterprises can use Chainlink’s blockchain agnostic middleware as a gateway to manage an entire blockchain strategy, while data providers can use it to sell their data across chains.
Chainlink’s Blockchain Agnostic Middleware
Given the fast pace and relatively young state of the blockchain industry, there are a limited number of core developers per blockchain and few integration specialists with deep expertise across multiple chains. Developers wanting to integrate with specific blockchain platforms often have to resort to relying on underdeveloped documentation or waiting in long queues to talk with the core development team. This creates a major bottleneck to development, as each new integration requires a direct collaboration between the two development teams or hiring outside assistance.
Chainlink creates decentralized and security-focused blockchain middleware that removes this bottleneck. Chainlink’s secure open-source middleware provides developers with a single integration gateway to bidirectionally communicate with any blockchain platform. Blockchain core developers only need to write one set of documentation detailing how Chainlink Nodes can support their chain. External systems can then leverage Chainlink’s decentralized network of oracle nodes to build smart contract applications that securely push data to and pull data from any of these blockchain environments. This blockchain agnostic framework comes in addition to having Chainlink enabled access to data providers, web APIs, IoT networks, legacy systems, fiat payments rails, and more.
Below are several key features of the Chainlink system that allow developers to interoperate between blockchains and with external resources.
Chainlink Core for Open APIs
Every Chainlink node runs the open-source Chainlink Core Software, which automatically formats messaging and data from any public API into a compatible format for smart contracts to consume. Anyone can spin up a Chainlink node and start providing open API data to smart contracts today.
External Adapters for All Other Connections
External adapters are serverless functions that extend the functionality of Chainlink nodes for specific tasks outside of what the core software supports. External adapters grant smart contracts on any blockchain access to the entire spectrum of off-chain data and services that exist outside of public APIs. This includes: retrieving data from authenticated data sources, reading/writing to external blockchains, performing scalable off-chain computation, and much more. Chainlink nodes can use pre-built external adapters, such as those listed on LinkPool’s Chainlink Market, Fiews’s Chainlink Adapters, CLCG’s Honeycomb Market, or build their own following Chainlink’s documentation.
Since Chainlink external adapters support credential management capabilities, nodes can access premium data behind paywalls. Chainlink Price Reference Data Contracts use this feature to source high-quality data from premium data aggregators such as BraveNewCoin, Kaiko, Amberdata, and more. External adapters also support permissioned authorization to private backends, allowing properly credentialed Chainlink nodes to perform functions such as retrieving invoices from an enterprise ERP system or a private consortium blockchain.
External Adapter/Initiator Based Blockchain Agnosticism
Chainlink nodes can use custom-built external adapters to gain the capability to read and write data in any blockchain environment. Nodes can also leverage custom-built external initiators to allow smart contracts on any blockchain outside of Ethereum to send requests directly to Chainlink nodes for external data. As an example, here is Conflux Network’s external initiator that allows smart contracts on Conflux to query and receive data directly from Chainlink nodes.
Through the external adapter/initiator form of blockchain agnosticism, blockchains are able to trigger Chainlink nodes and receive off-chain data, while Chainlink node payments and service agreements are settled on the Ethereum blockchain. These external adapters and initiators are able to be easily bootstrapped and connected to any Chainlink node currently live on Ethereum today.
Native Deployment Based Blockchain Agnosticism
For more native blockchain agnosticism, developers can deploy or rewrite Chainlink’s system of smart contracts (Oracle, Service Agreement, Aggregation, Data Consumer, etc.) into the native language of other blockchains. Additionally, a cross-chain token bridge can be used to permissionlessly bring LINK tokens into any other smart contract enabled blockchain environment, and moved freely within that environment with transfers being recorded in its native ledger. This allows smart contracts on these chains to natively pay for oracle services in the wrapped LINK token, without being subject to the latency or throughput of Ethereum.
The unique advantages of a native integration is that processing oracle functions like on-chain data aggregation, Price Reference Contract updates, node payments, or service agreement staking can operate as fast as the underlying blockchain. Thus, blockchains can receive off-chain data from Chainlink oracles with the desired latency, throughput, and security assumptions that match their exact ecosystem demands. Many blockchains are already natively integrating Chainlink via commits to the Chainlink Repo, such as Polkadot, Tezos, Kava, Ontology, and many more.
This open-source and permissionless blockchain agnosticism model has unlimited horizontal scalability, completely removing integration bottlenecks for developers wanting to quickly connect their systems with any blockchain environment.
Building an Enterprise or Government Blockchain Strategy Using Chainlink Middleware
The Enterprise/Government Dilemma
The current fragmentation of both permissioned and permissionless blockchain environments is quite extensive. Even with some consolidation over time, it’s likely to see various counterparties, industries, and entire geographic regions using a diverse set of blockchains with different trade-offs over the years to come. As such, large enterprises or government entities dealing with globally distributed or even locally distributed counterparties will be expected to eventually operate on dozens or more blockchain environments simultaneously.
As an example, while some entities in the west may be transacting on Facebook’s Libra, entities in the east may be transacting using China’s BSN. This means a multinational enterprise who wants to create an agreement involving both markets needs to support at least both networks, and very likely many more.
Maintaining compatibility across multiple blockchains and off-chain systems requires large technical teams with knowledge of the nuanced differences of each and every chain. Enterprises can respond by attempting to hire engineers from a limited pool of blockchain experts or spread out their limited engineering resources to support each of these individual blockchains. However, this is difficult to scale for a resource-constrained institution and ultimately dilutes the enterprise’s ability to deliver on its broader blockchain strategy.
The other major concern is the validation of the data flowing bidirectionally between an enterprise’s internal systems, different blockchains, and legacy partners without human intervention. While this automation may introduce substantial efficiency gains, it also brings additional risk, as outputs from one system will be used as inputs to another. As such, a data failure in one system can lead to a cascade of failures downstream. If enterprises are to succeed in using blockchains to create a single version of the truth (referred to as a “golden record”), generalized middleware with strong data validation functionalities is critical to maintaining accurate, tamperproof records across systems.
The Solution: Chainlink Middleware
Enterprises can use Chainlink middleware as a single integration gateway to communicate with any and all blockchain and legacy platforms. By Chainlink nodes having access to a growing library of external adapters and a simple framework for building new ones, enterprises can quickly integrate and support new blockchains as they become necessary. They can also interface their existing backend infrastructure with these on-chain networks, such as CRM/ERP systems, traditional bank payments, a counterparty’s systems, and much more.
Chainlink middleware allows enterprises to consolidate their engineering resources, focusing them on their core blockchain strategy of building efficiency saving applications. For example, building trade finance applications that validate ERP data from supply chains, that’s then used as smart contract inputs to trigger conditional settlements on traditional payment gateways.
If enterprises need to upgrade an application, they can swap out modular parts instead of completely rewriting the application. This allows the development of standard application frameworks that can be customized to fit specific business relationships. For example, upgrading the trade finance contract with new inputs/outputs depending on the specific business relationship or counterparty preference.
Chainlink also provides a robust selection of tools for implementing progressively stronger data validation strategies to secure the data passing between disparate networks. Some of Chainlink’s core features include the following:
- Open-Source Infrastructure — users can independently verify that code powering their backend infrastructure, bringing more robust security through a collaborative open-source development community
- Private Key Signatures — Chainlink Nodes sign every piece of data they move between systems, cryptographically proving their attestation
- Oracle Node Decentralization — redundant validation of the data sources, ensuring liveness and manipulation resistance
- Data Source Decentralization — aggregate multiple data sources, forming a more robust source of the truth
- Staking-Backed Service Agreements — crypto-economic guarantees backing data and oracle service quality, bringing Sybil resistance and determinism to off-chain systems
- Defense in Depth — additional security guarantees outside of decentralization, offering features such as Trusted Execution Environments (Town Crier), Mixicles, TLS verification of web sessions (DECO), and more.
Enterprises and governments can feel confident in building highly scalable and secure blockchain strategies using Chainlink’s open-source, blockchain agnostic, and decentralized middleware.
Data Providers Can Sell Data to Any Blockchain Using Chainlink Middleware
Chainlink’s oracle middleware model enables existing data providers to become “blockchain-enabled” across chains. Once an external adapter is created for the data provider’s API, Chainlink nodes can provide that data/service to all the blockchain environments they support. This creates stronger incentives for data providers to put data on-chain, as they can capture a much larger market share without technical expertise of every blockchain. Smart contract developers also benefit from having more on-chain data to augment their decentralized applications.
Importantly, data providers don’t have to disrupt their current business model to sell data to smart contracts. Data providers can receive payment from Chainlink nodes in fiat currencies rather than cryptocurrencies. Furthermore, data providers can track API usage and maintain existing subscription models using their current systems without any modifications.
More tech-savvy and future thinking data providers can opt to sell their data directly to smart contracts by running their own Chainlink nodes. These data providers are pioneering a completely new business model, as well as giving users the added benefit of receiving data signed directly from the source via the Chainlink Node’s private key. This creates an on-chain cryptographic proof attesting to the data’s authenticity. The more data providers that run their own node and bring signed data on-chain, the stronger the Sybil resistance is across the entire decentralized oracle network. This becomes especially powerful in combination with binding service agreements for data quality and uptime guarantees for each node operator.
Chainlink’s support for credentialed APIs is a critical component in bringing off-chain data providers to blockchain environments because it protects the monetary incentive to create high-quality data. Oracles without credentialed functionalities will either be subject to pirated data, mirrored data, query rate limits, lower-quality data sources, or completely removed from offering important off-chain connections only available with credentials. This severely inhibits the creation of many types of smart contracts that require credentialed data to even exist. Smart contracts will not scale to support enterprise use cases and larger DeFi markets without being able to consume high-quality data from well-run data providers.
Conclusion
Through its open-source development framework and ability to support any blockchain environment, Chainlink middleware can become a standard gateway for any enterprise, government, dApp, and data provider to quickly integrate and access the full power of any blockchain network. As more blockchains, enterprises, and data providers are onboarded, the network effects start to take hold, creating a connection-rich environment for automated applications to take root.
Any developers, data providers, or enterprises wanting to learn more, be sure to check out their developer documentation and reach out to them in their Discord.
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