Today, the Depository Trust and Clearing Corporation (DTCC), a leading financial market infrastructure (FMI), announced the results of its Smart NAV industry pilot, which leveraged DTCC’s digital asset capabilities and Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to demonstrate how traditional financial institutions can deliver key mutual fund data onchain.
Chainlink is the industry-standard decentralized computing platform, which has enabled over $10.5 trillion in transaction value and provides a comprehensive suite of oracle services that are critical for creating and securing tokenized real-world assets throughout the multi-chain ecosystem.
As illustrated by Swift’s proof of concept, CCIP allows traditional financial institutions to transact with a wide range of private and public blockchains using their existing infrastructure, unlocking new markets and use cases for tokenized assets by allowing them to flow freely between chains.
In response to growing interest in mutual fund tokenization, DTCC designed the Smart NAV pilot to explore an extension of its Mutual Fund Profile Service I (MFPS I), the industry standard for transmitting net asset value (NAV) data, and demonstrate the utility of delivering such data onchain.
DTCC collaborated with 10 of the world’s largest financial institutions to develop a chain-agnostic approach to DLT-based data dissemination utilizing CCIP as a secure blockchain abstraction layer.
The pilot demonstrated how trusted, verifiable NAV data sourced by DTCC could be delivered onto blockchains via CCIP to unlock a variety of primary use cases, such as tokenized funds and “bulk consumer” smart contracts that retain data for multiple funds, as well as numerous downstream use cases, such as brokerage portfolio applications.
According to DTCC’s announcement, “The core capability explored is applicable across endless use cases that could ultimately power more streamlined and efficient operational processes.”
The results pave the way for future exploration of how these technical capabilities could “power a broader range of use cases beyond the dissemination of price and rate data and across a greater number of blockchains.”
In a new video, Chainlink co-founder Sergey Nazarov called the pilot “a very significant step forward” in blockchain adoption.
“The fact that this large organization and this large collection of participants have come together to solve a problem using blockchains, smart contracts, and oracle networks really proves where the blockchain technology adoption cycle is right now and it’s starting to show real value,” he explained.
He underscored the benefits of using blockchains to make financial processes “orders of magnitude more efficient” by eliminating vast quantities of paper documents. “I think the conclusion of everybody is that the efficiency gain from this is massive,” he said.
Read the full report here.