APPLICATIONDEVELOPMENT

Chainlink Co-founder: RWA More Valuable Than Native Cryptocurrencies

share
Chainlink Co-founder: RWA More Valuable Than Native Cryptocurrencies

Chainlink co-founder Sergey Nazarov explained at the 2024 Eth CC conference the impact Tokenized Real World Assets (RWA) can have on the global financial market, and introduced the important role that Chainlink's Oracle plays in this trend.

According to on-chain data, the tokenization of real-world assets on public blockchains has reached $170 billion, surpassing decentralized finance (DeFi) at $90 billion. Chainlink, as the first ecosystem that collaborates with traditional financial institutions and focuses on cross-chain development and management within blockchain systems, ambitiously predicts that all traditional assets will be tokenized and integrated into traditional institutions in the future.

Table of Contents

Chainlink Allows Users to Avoid Unverifiable Applications

Sergey Nazarov explains how the Chainlink Oracle Network operates to protect institutions and investors from being deceived by false data in applications, enabling risk assessment. The Chainlink Oracle Network can analyze whether the data in applications is genuine and valid, preventing events like FTX bankruptcy or flash loan attacks. By integrating seven major data types into the oracle through the Chainlink ecosystem, including Proof of Reserve, Market Prices, Reference Data, Identity Data, New Asset Value, Risk Rating, and Any/All Other Data, institutions can access various analyzed data indicators.

The Importance of Asset Value for Tokenized Funds

Taking Fidelity International Funds as an example, professional investment managers utilize asset net value data within the Chainlink ecosystem to evaluate the proportion of assets and liabilities, ensuring the stability of liquidity and reserve funds in Fidelity's funds. By on-chain recording NAV data through ZKsync smart contracts and recording buy and redemption records, customer asset security can be guaranteed. Unlike traditional blockchain financial systems supervised by engineers, the current system is managed by professional digital asset managers. Institutions hire hundreds of professionals to manage assets.

DTCC's Smart Asset Net Value Contract

Chainlink collaborates with DTCC trust institutions to help clients accelerate settlement and manage the lifecycle of each fund, reducing client risks. Through Chainlink's Smart NAV contract, all stakeholders' funds and assets are put on-chain as smart contracts, regardless of currency type or chain.

ANZ & CCIP: Cross-Currency Trading and Cross-Chain Settlement of Real-World Assets

By tokenizing real-world assets, handling multiple cross-chain and multi-currency transactions, buyers and sellers' data are aggregated by Chainlink's database. Financial transactions are processed through three methods: Programmable Token Transfer, Automatically Trigger Exchange, and No chain integration by user.

CCIP: Connecting Capital Markets Using Existing Trading Standards

Chainlink's CCIP aggregator can be used by traditional financial institution development teams to create applications, enabling rapid encrypted transmission of each transaction through CCIP routers, upgrading SWIFT telegram transmission to connect global capital markets.

Chainlink's ultimate goal is to establish a standard integrating all real-world data and encrypting audits through on-chain contracts, generating nodes for data through multi-party verification, providing blockchain technology solutions for the upcoming tokenization of everything in the new world.

Nazarov is optimistic about the future of Tokenized RWA, believing that the market value will surpass native cryptocurrencies in the blockchain.