During Blockchain Rio 2024, Chainlink co-founder Sergey Nazarov delivered a presentation on how Chainlink-powered tokenized real-world assets can far exceed cryptocurrency’s impact by fundamentally transforming asset ownership and financial transactions on a global scale.
“Our industry is at a very key inflection point where it’s going to grow well beyond cryptocurrencies and into the real world,” he said. “By growing into the real world, it will redefine our industry from something that is about meme coins and things that are not backed by real value into how the world works.”
He described tokenization as the solution to various backend risks and limitations within the current financial system. “The economic part of our lives is still managed in a way that’s suboptimal,” he said.
In Nazarov’s view, the blockchain industry’s purpose is to build a basic infrastructure that allows the world’s value to be reformatted into a superior state onchain.
“This basically means that all of our digital relationships, all of our value, all of our assets, all of our transactions will be somehow secured by a blockchain, similarly to how today they are secured in databases,” he explained. “And the fundamental reason for this is that blockchains are a more reliable, more secure, also cheaper and faster way to secure those relationships and that value.”
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 unlocking tokenized assets with benefits such as atomic settlement, fractionalization, programmability, and the ability to serve as a unified golden record that combines ownership rights and vital data into a single continuously updated smart contract.
Beyond connecting tokenized assets to accurate, reliable offchain data and securely moving assets between networks, Chainlink allows traditional financial institutions to transact with blockchains using their existing infrastructure.
“It is not about replacing technology; it is about layering it,” Nazarov explained. “Compatibility is the key aspect of our approach that I think will allow the industry to grow more rapidly.”
Chainlink’s work with Swift, the world’s biggest provider of secure financial messaging services, successfully demonstrated how global financial institutions can transact with multiple blockchains using Chainlink’s Cross-Chain Interoperability Protocol (CCIP).
In May, DTCC collaborated with 10 of the world’s largest financial institutions to develop a chain-agnostic method for delivering trusted, verifiable net asset value (NAV) data onchain via CCIP. The results show how CCIP can unlock critical use cases such as tokenized funds, which Nazarov views as the “fastest-moving, biggest category” of real-world asset tokenization.
Earlier this month, at Point Zero Forum in Zurich, Switzerland, Chainlink announced a collaboration with Fidelity International and Sygnum to bring NAV data for Fidelity International’s $6.9 billion Institutional Liquidity Fund onchain.
“This is the inflection point,” said Nazarov. “Our industry is not going to be just about cryptocurrencies made on public chains; it’s going to be about all kinds of assets on public chains and private chains that are made by both startups and the largest financial institutions in the world.”
Watch the full presentation.