During EthCC, Chainlink co-founder Sergey Nazarov caught up with The Defiant to discuss important developments in real-world asset tokenization since his previous interview with the publication during Token2049.
Nazarov’s EthCC keynote outlined the growth of Chainlink-powered tokenized assets with the capacity to reformat the world’s value within a global internet of contracts. As the industry-standard decentralized computing platform, Chainlink has enabled over $15 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.
“We’re going towards a single internet of contracts where you have all the DeFi folks and all the TradFi folks on a single interconnected internet of contracts,” Nazarov told The Defiant.
“The Chainlink set of protocols is the most widely used technology for real-world assets,” he continued. “The reason I think the Chainlink community has gone towards real-world assets is because it’s been a part of the thesis of how the existing public blockchain world and the traditional financial world are going to interconnect with each other, and I think that thesis that the Chainlink community has had for a long time is playing out now very clearly.”
Nazarov believes tokenized assets are gaining traction because they open markets for new and existing financial products like tokenized funds while unlocking benefits such as atomic settlement, fractionalization, programmability, and the potential to create a unified golden record that combines ownership rights and vital data into a single continuously updated smart contract.
“The best real-world assets are the ones that open up a new market and do it with a form of the financial product that’s more efficient,” he explained. “I think fund tokenization has both of these properties.”
Following the launch of BlackRock’s BUIDL in March, Chainlink has been at the forefront of growing interest in fund tokenization. In May, the DTCC collaborated with 10 of the world’s largest financial institutions to demonstrate how Chainlink’s Cross-Chain Interoperability Protocol (CCIP) can bring critical net asset value (NAV) data onchain. In June, Chainlink announced a collaboration with Fidelity International and Sygnum to bring NAV data for Fidelity International’s $6.9 billion Institutional Liquidity Fund onchain.
As a result of these collaborations, Nazarov said Chainlink has emerged as the preferred way to deliver key NAV and Proof of Reserve data for tokenized funds onchain while unlocking cross-chain liquidity through CCIP.
“What I’m seeing now is a consistent stream of even more great tokenized funds that need both NAV data and proof of reserves and other kinds of data,” he said. “Also, they will have and do have this liquidity problem, where liquidity is split across multiple chains, with Chainlink being the only system that can provide them the data and the connectivity to the liquidity in a single system.”
Watch the full interview.