Blockchain oracle network Chainlink has joined forces with Ethereum layer-2 scaling protocol Arbitrum to advance the development of cross-chain decentralized applications.
This partnership has resulted in the launch of the Chainlink Cross-Chain Interoperability Protocol (CCIP) on Arbitrum One’s mainnet, providing developers with access to Chainlink’s solution integrated with Arbitrum’s high-throughput and cost-efficient scaling capabilities.
Unlocking a Range of Use Cases
The collaboration between CCIP and Arbitrum One’s ecosystem holds the promise of unlocking various use cases. These include cross-chain tokenization and collateralization, applications in blockchain gaming, data storage, and computation.
Arbitrum’s Role in Transaction Offloading
Chainlink Labs’ Chief Business Officer, Johann Eid, highlighted the significance of Arbitrum in alleviating transaction congestion on Ethereum’s base layer and serving as a foundation for decentralized application (DApp) development.
CCIP offers users an accessible and highly secure interoperability protocol, leveraging Chainlink’s established infrastructure. This collaboration is poised to foster growth, accessibility, and innovation within the ecosystem.
Integration with Arbitrum’s Optimistic Rollup Technology
However, the integration combines Arbitrum’s optimistic rollup technology, which currently holds approximately 60% of the total value locked in Ethereum’s layer 2 ecosystem.
Arbitrum facilitates rapid, low-fee transactions by batching them off-chain before submitting them to Ethereum’s base layer. The optimistic rollup technology is considered valid unless challenged by network validators.
CCIP’s Contribution to Cross-Chain DApps
Moreover, CCIP empowers developers to create cross-chain DApps that utilize arbitrary messaging and simplified token transfers. This leverages Chainlink’s decentralized oracle network, enabling secure access to off-chain data sources, APIs, and payment systems for smart contracts.
It’s worth noting that StarkWare, a prominent Ethereum scaling technology firm, previously integrated Chainlink’s oracle services. StarkWare’s zero-knowledge proof rollup protocol, StarkNet, incorporated Chainlink’s data and price feeds into its ecosystem in February 2023.
Impact on Chainlink Token LINK Prices
Despite the recent announcement, Chainlink (LINK) has experienced a relatively modest impact on its price, showing a 2% decline to $6.75 over the past 24 hours, as reported by CoinMarketCap. Similarly, Arbitrum has also seen a downturn, with its valuation dropping by 3.3% to $0.8211.
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