In a recent webinar, Chainlink Labs’ CeFi Lead, William Reilly, and Paxos’ Head Of Asset Growth, Nick Robnett, explored how real-world asset tokenization can transform global finance and what Chainlink and Paxos are building to turn this future into reality.
Tokenized real-world assets are blockchain-based tokens that represent physical or traditional financial assets, such as cash, debt, securities, commodities, and real estate. Because tokenized assets confer new opportunities such as fractionalization and programmability alongside better liquidity, transparency, and risk management, the space is projected to reach $10 trillion by 2030.
As the industry-standard decentralized computing platform, Chainlink has enabled over $12 trillion in transaction value and provides a comprehensive set of services that are critical for creating and securing tokenized assets throughout the multi-chain economy.
As the leading regulated blockchain infrastructure and tokenization platform, Paxos issues multiple tokenized assets including PYUSD, PayPal’s payments stablecoin; USDP, a fully backed USD stablecoin; and PAXG, backed 1:1 by gold stored in LBMA vaults.
Earlier this year, Paxos announced PYUSD is secured by Chainlink’s PYUSD Price Feed on Ethereum mainnet. The integration allows web3 users to create secure markets around PYUSD and select it as their preferred stablecoin for onchain payment.
“A big part of putting these assets on the blockchain is that you bring them to the entire decentralized web3 ecosystem,” Robnett explained. “And a really critical part of us being able to do that is the partnership with Chainlink.”
Chainlink Price Feeds have delivered billions of highly accurate, decentralized market data points onchain. Because Chainlink’s time-tested oracle network has proven secure and reliable even during adverse and unexpected events such as flash loan attacks, it is the industry standard for securing tokenized assets and stablecoins.
“That market data is just a hard requirement for decentralized entities to have the source of truth that they need so that they can interact with these assets onchain, on the different venues where they need to know what the price is at all times to create secure markets,” said Robnett.
“Chainlink’s price feed for PYUSD has allowed it to get listed on lending and borrowing markets, where now there are millions of dollars worth of PYUSD being lent and borrowed on a day-to-day basis,” Reilly said.
“Once you have that type of market in place, you also want to engage with other chains,” he continued. Chainlink’s Cross-Chain Interoperability Protocol (CCIP) allows tokenized assets and stablecoins like PYUSD to move between chains seamlessly and on-demand, eliminating liquidity fragmentation throughout the web3 ecosystem.
Robnett believes improving web3’s user experience and creating real-world utility such as cross-border payments will ultimately bring tokenized assets to mainstream adoption.
“When you look at a really specific problem like that, you can line up all the pieces and do something really meaningful,” he said. “Those wins are going to build lots of momentum really quickly.”
Reilly agreed. “We have to put one foot in front of the other before we can start really running together in this space,” he said.
Watch the full conversation.