# What is Chainlink CCIP and why is it so important?

**Published by:** [Joe Hoffend](https://paragraph.com/@joehoffend/)
**Published on:** 2023-09-28
**URL:** https://paragraph.com/@joehoffend/what-is-chainlink-ccip-and-why-is-it-so-important

## Content

What is CCIP from Chainlink, and why is it so important? Here’s an overview anyone can understand: First, if you aren’t familiar with Chainlink, it started as and is best known for being an “Oracle” solution with blockchain. What’s an Oracle? It helps bring off-chain data (example: Weather data) onto the blockchain in a secure, trusted and verifiable way. We can’t let anyone just say it was 90 degrees every day in Antarctica right? So Oracles are super important and help bring data that isn’t “blockchain native” onto the blockchain. Ok so what’s CCIP? It stands for Cross-Chain Interoperability Protocol. It’s a way for blockchains to communicate with each other in a standard way. Originally, blockchains are all mostly segregated, and can’t interact with each other. The chains are essentially like walled gardens. This hurts liquidity and creates a lot of friction in chains being able to collaborate together, because it’s like they are each speaking their own language. Ultimately, the chains remaining silo’d will limit the use cases that blockchains can harness. It’s basically a sure thing that multiple blockchains will co-exist long-term, so there needs to be a standard way (common language) for them to interact. Chainlink has been working with SWIFT (Society for Worldwide Interbank Financial Telecommunications) and other banks to design CCIP in a manner that will work for them out of the gate. Having these design partners is important as they are working with real customers who can give valuable feedback to build the proper communication standards back and forth. This is important because the reality is that the technology the financial system uses has been built up over the past 40 years. It holds such a tremendous amount of value on it and has been “battle tested” for so long, it won’t simply be ripped out and replaced. Not to mention it has millions of users familiar with it. So CCIP ultimately unlocks a bunch of use cases, here’s some examples:Transfer tokens between chains in a secure way. “Bridges” to date which allow for moving assets between chains have been built in more exploitable ways than CCIP, which goes about this with a much more chain-native approach.Hold NFTs on multiple chains that can be part of a single interaction/experience (like a game)DeFi activities such as lending and borrowing cross-chain with assets from one chain being lent on anotherThere’s a lot of impressive engineering work behind all this, but we’re keeping it simple and easy here. Side note: Chainklink CCIP isn’t a monopoly, there are other cross chain communication projects, such as LayerZero and Axelar. Enjoyed this? Please Subscribe for more content!

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