This week at Mainnet 2024 hosted by Messari, the leading provider of crypto market intelligence products, Nasdaq TradeTalks’ Jill Malandrino sat down with Head of Tokenization and Alliances at Chainlink Labs, Colin Cunningham, who detailed how Chainlink enables tokenized real-world assets (RWAs) to reach their full potential and ultimately achieve mainstream institutional adoption.
As the industry-leading decentralized oracle network, Chainlink has enabled over $15 trillion in transaction value throughout the world of crypto and decentralized finance (DeFi).
“Most of the assets that exist in the onchain universe today were born there,” Cunningham explained. “Versus what we see with traditional tokenized assets – all the data for these assets sits offchain.”
This is why Chainlink evolved to offer essential tokenization infrastructure beyond Data Feeds, including Proof of Reserve (PoR) and Cross-Chain Interoperability Protocol (CCIP). Together, these services provide the foundational data and cross-chain connectivity traditional financial institutions need to create, secure, and update data-driven RWAs throughout their entire life cycle on any chain.
“We’re not only moving the data onchain; we’re actually enabling these tokens, through our Cross-Chain Interoperability Protocol, to move from one chain to another,” Cunningham said. “If you’re a large financial institution trying to access this onchain financial ecosystem, Chainlink’s providing the infrastructure that enables you to make your assets smart, scalable, and secure so that you can access the widest set of the onchain financial ecosystem in the way that you choose.”
Over the past year, Chainlink has been central to TradFi’s growing interest in fund tokenization as the most widely used provider of net asset value (NAV) data onchain for funds such as Fidelity International’s $6.9 billion Institutional Liquidity Fund. Meanwhile, PoR has established a new standard for digital assets, decentralized exchanges, and crypto ETFs such as the ARK 21Shares Bitcoin ETF (ARKB) and the 21Shares Core Ethereum ETF (CETH).
“When we think about net asset value price per share, we’ve got to bring that onchain; at the same time, as we start to look at the proliferation of all these different funds onchain, you also need the reserve value,” Cunningham explained.
Chainlink co-founder Sergey Nazarov’s long-term outlook for Chainlink is to enable virtually all of the world’s value to be reformatted into a superior state onchain within a global internet of contracts that unites DeFi and TradFi. Cunningham described the connectivity, composability, programmability, and utility of Chainlink-powered RWAs as the key to unlocking tokenization’s mainstream adoption.
“Interoperability is the glue that’s weaving it all together,” he said. “That’s why we start to think about this ecosystem of assets that are super interconnected in a way that starts to create a place where we think institutions are starting to become very comfortable with adopting that technology set and some of the ecosystem players that are within it.”
Watch the full conversation.