Sergey Nazarov — Co-founder and CEO of Chainlink, a decentralized oracle network that feeds real-world data to blockchain smart contracts. A long-time smart-contract pioneer who started building in the space seven to eight years before this 2021 conversation.
The gist
Sergey Nazarov joins Lex Fridman to explain the leap from on-chain code to 'hybrid smart contracts' that combine blockchain agreements with off-chain proofs delivered by decentralized oracle networks. He argues that decentralized finance offers transparency, control, and superior yield over traditional banking, and that the same pattern solves trust issues across insurance, supply chains, ad networks, data marketplaces, and even AI oversight. Recurring examples include crop insurance for emerging markets and confidentiality-preserving computation. The conversation ranges philosophically across simulation, definitive truth, Bitcoin as non-governmental fiat, Ethereum's complementary role, and the identity of Satoshi Nakamoto.
Big reveals
- Nazarov says he would choose to live in a high-fidelity digital world with immortality over the physical one.
- He claims DeFi pays 7-8% on US dollars versus 1% or less at a bank, with more transparency and control.
- He envisions politicians codifying campaign promises (like redistributing oil revenue) into enforceable smart contracts.
- He frames blockchains and private keys as guardrails to limit and supervise powerful AI systems.
- When asked if he is Satoshi Nakamoto, he flatly denies it and guesses Satoshi is a group, some possibly no longer alive.
- He calls Chainlink fully complementary to Ethereum, not competitive, since oracles augment rather than run smart contracts.
- He contrasts 'brand-based paper guarantees' (banks with marble buildings) against mathematically guaranteed contracts.
Things worth remembering
- Nazarov suggests a convincing virtual world may be achievable within a century, maybe like a high-fidelity Quake game tricking the visual cortex.
- He blames the 2008 mortgage crisis on the opaque, hard-to-understand nature of centralized finance.
- Some Chainlink networks use over 30 nodes and over 10 data sources reaching consensus on a single piece of data.
- He uses Uber as an analogy: it relied on Google Maps, Twilio, and Stripe, services oracles bring to smart contracts.
- Crop insurance via smart contracts could let emerging-market farmers leapfrog corrupt legal systems and insurers.
- Insurance firms already use drones to count hard hats on construction sites, real data feeds that could trigger smart contracts.
- He cites Greece's crisis where ATMs were limited to 66 euros per day as why people may migrate to math-guaranteed contracts.
- A Chainlink paper called Mixicles, presented at Stanford, shows how to keep contract computation private using trusted execution environments.
- Before Ethereum, making a new smart contract required protocol developers and could take months or over a year.
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Chainlink 2.0 white paper
Sergey Nazarov / Chainlink
“you talk about confidentiality in the in the white paper for chain link 2.0 can you talk more about how to achieve confidentiality” — guest 01:21:50Find it on Amazon