ChainLink founder says DeFi and Oracles Can Fight Climate Change

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Chainlink co-founder Sergey Nazarov argued at Consensus 2021 that Decentralized finance (DeFi) and Oracles could play a pivotal role in combating climate change.

He laid out two cases specifically where Chainlink 2.0’s hybrid smart contract model in which decentralized oracle networks collect data off-chain and blockchains provide security, could immensely help.

Nazarov spoke about how oracles can help expand regenerative agriculture, a form of farming that deepens the soil and leaves the land healthier when farming takes place, and captures more carbon in it for a longer time.

While agriculture is a high-risk field globally, farmers, particularly in the developing world need help to protect against bad weather conditions such as droughts and flood. ChainLink is making its oracle network accessible to projects that want to expand risk management beyond the typical reach of insurance companies.

Nazarov’s comments come at a time when the energy consumption of cryptocurrencies, especially Bitcoin, which relies on the computationally intensive mining system, has become a burning issue.

Most recently, Tesla CEO Elon Musk convened a group of high-profile North American miners to combat the public perception of crypto as a “dirty” industry by promoting energy-efficient practices.

“I think what climate change will do is it will shift rain patterns and it will shift how rain patterns will be utilized,” Nazarov said, which could possibly alter weather risks with more severe weather events.

“This is where I think decentralized crop insurance through insuretech protocols such as Arbol that use things like Chainlink and Ethereum are truly amazing,” Nazarov said.

You’re able to prove things that are meaningful about environmental outcomes,” Nazarov argued.  “I think at the end of the day, you have a truly amazing ability to make DeFi as a market function,” Nazarov said. “More importantly, it actually creates a market for various societal outcomes.”

Sergey Nazarov also spoke extensively on how the transparency of DeFi over the long term could render centralized financial products appear less appealing, as well as reduce incidents of fraud across the global financial system and upgrade the atmosphere while it does so. Nazarov contended all of this can be enabled by allowing truly decentralized blockchains to access data from the real world.

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