Chainlink Launched on Monday, CCIP 2.0 is the latest version of its cross-chain infrastructure. Banks and crypto projects are increasingly using this software layer to transfer tokenized funds between blockchains without having to build bridging systems from scratch, such as stablecoins, encapsulated Bitcoin, and tokenized funds.
The reason for needing this infrastructure is that blockchains are not interoperable with each other. Ethereum has no knowledge of what is happening on Solana. Therefore, when a token is transferred from one chain to another, someone must confirm that the funds have indeed left the first chain before they can appear on the second chain. This role is played by bridges, and the way bridges function is by relying on a certain validator to prove the transfer.
The cost of this trust is high. Over the years, bridging systems have lost billions of dollars due to hacker attacks, often because they rely on single points of failure: one verifier, and it's enough for them to deceive just that one point.
The solution proposed to address this single point of failure is a new feature named Cross - Chain Verifier, abbreviated as CCV. Institutions can now run their own verifiers – which is a second level of check on the files before transfer settlement – or hire companies such as Infosys and Nethermind to provide this service. Introduction kits are also available for Amazon Web Services and Google Cloud.
At the underlying level, Chainlink still operates its default checks: a committee composed of 16 independent node operators reaches consensus on each transfer, and all 16 companies must agree that the transaction is valid. This part has not changed.
What has truly changed is the less conspicuous aspects. The risk management network – a set of independent nodes that used to re-check the work of the main committee – has now seen its importance diminish. A document with the identifier Chainlink states: “The automatic off-chain role of the risk management network is no longer active in the current CCIP deployment, but it is expected to be provided as an optional verification layer in future versions.”
On-chain contracts are still retained, but only as an emergency backup. Chainlink indicates that the same independent checks can also be undertaken by the optional CCV. In fact, this means that if an institution does not take any additional measures, it is now relying on one verification network, rather than the two from before.
This is no longer just a problem for the DeFi traders. Chainlink indicates that over the past four months, $15 billion in tokenized assets have been migrated to its network, including BitGo-encapsulated bitcoins and a portion of Coinbase's cbBTC. These assets are increasingly appearing behind ETF and banking products, and ordinary users who hold these products may not even come into contact with cryptocurrency wallets at all.
This timeline can be traced back to April. At that time, hackers associated with North Korea Lazarus Group stole approximately $292 million from Kelp DAO. Kelp DAO is a protocol that allows users to stake Ethereum and transfer tokens across chains. The bridging system of Kelp operated on LayerZero and was configured with a single validator; afterwards, it was acknowledged to be a mistake, and support for this setup was discontinued for new deployments.
The selling point of Chainlink is built on the premise that "it has not been hacked." CCIP 2.0 grants institutions the same flexibility that has put LayerZero in trouble; however, by default, each transfer is still checked by a committee composed of 16 operators.
Chainlink Labs Chief Commercial Officer Johann Eid stated in a release: "Historically, traditional bridging solutions have resulted in billions of dollars in losses due to insecure infrastructure, while self-built solutions are slow and costly, and institutions' proprietary networks also fail to gain the trust of their peers."
Chainlink indicates that the cross-chain token value currently guaranteed by CCIP exceeds $84 billion, a figure disclosed by the company itself. A total of 18 companies are listed as publishing partners, but upon closer inspection of their statements: Fidelity claims that this upgrade "has the potential to support" a wider distribution, while Further Asset Management merely indicates "intention to cooperate." Within just a few hours of the release, there were still very few confirmed and deployed new validators.
