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On-chain and off-chain contract composition in a hybrid smart contract
On-chain and off-chain contract composition in a hybrid smart contract

Context

This figure appears in the Introduction's discussion of hybrid smart contracts, which is identified as the first and most central of Chainlink 2.0's seven key design goals. It illustrates the architectural split between on-chain and off-chain components that defines the hybrid contract model. The whitepaper describes hybrid contracts as the primary vehicle through which DONs will extend the capabilities of smart contracts across all blockchains.

What This Figure Shows

The figure depicts a hybrid smart contract as composed of two complementary components: an on-chain component (SC) residing on a blockchain, and an off-chain component (exec) executing on a DON. The DON acts as a bridge between these two components and also connects the hybrid contract with external resources such as web services, other blockchains, and decentralized storage. The numbered labels (1, 2, 3) correspond to SC, exec, and the hybrid contract as a whole, respectively. This architectural split allows the on-chain component to benefit from blockchain security and finality while the off-chain component handles high-performance computation, data access, and services that are infeasible on-chain.

Significance

Hybrid smart contracts are the foundational paradigm of Chainlink 2.0, enabling smart contracts to transcend the severe limitations of purely on-chain execution—including slow speed, high cost, and inability to access real-world data. This figure provides the conceptual template that all subsequent DON-enabled applications follow, making it a key architectural reference for the entire whitepaper.

Related Glossary Terms

Other Figures from Chainlink