Chainlink Labs

So, you’ve heard of crypto tokens. But have you heard of clay tokens from ~10,000 years ago? How we evolved from clay to cryptography 🧵 1. ~7500-3000 BC: Clay tokens In Mesopotamia, clay tokens were used to represent value, enabling trade and barter. These tokens enabled some of the earliest forms of recorded transactions and were used to keep track of goods such as grain and livestock. Problem: Clay tokens lacked standardization and portability, and were likely tied to specific geographic regions, hindering their widespread adoption. 2. ~600 BC: Gold coins Gold coins were first used in The Kingdom of Lydia. Lydian coins, typically made from a gold-silver alloy called electrum, standardized value and facilitated trade across regions, laying the foundation for modern monetary systems. Problem: Due to their high value, even the smallest-denominated electrum coins were initially only used for large-scale retail transactions. 3. ~11th century: Paper notes Jiaozi (Chinese: 交子) was a form of promissory note that appeared in China around the 11th century during the Song Dynasty. Historians regard Jiaozi as the first paper money in history. Problem: Jiaozi circulation stopped quickly after their introduction, as the government was unable to regulate their production, leading to an undesirably high inflation rate. 4. ~14th century: Medieval accounting During the medieval period, advancements in accounting practices emerged. One of the most notable developments was the invention of double-entry bookkeeping, which revolutionized financial record-keeping and business transactions. Problem: Double-entry bookkeeping was relatively slow to spread in medieval Europe due to its complexity and a scarcity of trained accountants capable of implementing the system correctly. 5. 20th century: Electronic finance The growing use of computers paved the way for the digitalization of finance. The development of credit cards in the 1950s marked the beginning of electronic financial transactions, eventually leading to modern digital banking. Problem: While financial transactions are stored in an electronic format, they are recorded across a fragmented collection of databases managed by various centralized intermediaries. 6. 21st century: Tokenized finance Today, blockchain technology is enabling the creation of tokenized value. Cryptocurrencies like Bitcoin and the subsequent launch of tokenization platforms such as Ethereum are paving the way for fully onchain representations of value. Problem: Financial institutions are launching blockchains to tap into the benefits of tokenized assets. However, this fragments liquidity across trading environments—the tokenized asset ecosystem needs a universal interoperability standard to unify all tokenized asset liquidity.

The adoption of tokenized assets is at a tipping point. This report examines prominent events in Q2 2024 and breaks down how Chainlink PoR, Chainlink’s Daily Reference Price, and other #Chainlink services can enhance the tokenization economy: https://lnkd.in/gn5uAAXy

The Chainlink platform for capital markets: • Data to enable the creation & transaction of tokenized assets. • Cross-chain interoperability to maximize liquidity & user access. • Synchronization to connect onchain economies to legacy systems & technologies. #LinkTheWorld

Transforming real-world assets into a tokenized format is how #blockchain scales to mass adoption. A deep dive into tokenized assets with Chainlink and Paxos: https://lnkd.in/gk5kaWjy

Tomorrow, leaders from Backed Finance AG, #Chainlink, INX and Polygon Labs will discuss the convergence of DeFi and TradFi. Tune in to learn how tokenization infrastructure is empowering institutions to enter the onchain economy.

“For both Fortune 100 and Fortune 500 companies, blockchain as operational infrastructure is the main driver of innovation and ambitions in web3,” according to a recent industry report on corporate adoption by Coinbase. The report highlights these companies' reason for investing and innovating in blockchain technologies: “Because they know that our century-old global financial system needs updating, that blockchain can be a foundational solution, and that not keeping pace will mean losing ground in this global economy to competitors around the world.” Read in full: https://lnkd.in/eWNkpmMN

Just like #Chainlink Price Feeds enabled DeFi, Chainlink NAV data enables markets to form around tokenized funds. A new era of onchain finance is upon us: https://lnkd.in/gKjiaXXQ

Top story: 300% rise in digital asset trading volumes for Singapore's DBS Bank Digital Exchange (DDEx) Custodied assets increased 80% in SGD terms and active clients are up 36% for DDEx. The exchange is now considering enabling clients to stake Ethereum and exploring listing stablecoins. Also, DBS is the custodian for Paxos’ upcoming Singapore #stablecoin, which was announced last week. More industry news from around the world: 1. European Securities and Markets Authority (ESMA) mandates use of Digital Token Identifier ESMA now requires the use of the standardized Digital Token Identifier (DTI) for crypto-assets, making it a core reference point for EU capital markets. Swift and Six Digital Exchange have already adopted the DTI. 2. Visa showcases tokenized deposit use cases with HSBC and Hang Seng Bank The use case demonstrated multiple settlement processes, including a high-value real estate transaction and Visa card payments. 3. Taiwan central bank starting wholesale CBDC trials The wCBDC will be used for interbank settlement of tokenized deposits, tokenized asset transactions, and programmable transactions known as purpose-bound money. 4. FX payment vs. payment (PvP) tested by DBS, J.P. Morgan, Mizuho, and Partior The proof of concept tested FX payment versus payment (PvP) settlement using Partior’s #blockchain network, with JP Morgan, DBS, and Mizuho as participants. 5. Coinbase and Greengage collaborate on blockchain-based financing for SMEs Coinbase partnered with the London-based financial services provider to help small and medium enterprises (SMEs) access institutional-grade credit markets. In other tokenized RWA projects, Schroders Capital partnered with Hannover Re to tokenize insurance-linked securities—bonds used to hedge risks of extreme weather events—while Fasset and Dinari partnered to provide tokenized securities. 6. Bank for International Settlements – BIS Approves disclosure framework for crypto exposures Banks will be required to disclose qualitative information on their #crypto activities and quantitative information on their exposure to crypto. 7. Invesco US Galaxy sets spot Ethereum ETF fee at 0.25% in latest round of filings The fee is above VanEck’s 0.20% fee and Franklin Templeton’s 0.19% fee. BlackRock, Fidelity, 21Shares, and Grayscale have not disclosed fees. Sources below.

Real World Asset (RWA) tokenization is the next big trend in the blockchain industry and I believe it is on track to hold more onchain value than cryptocurrencies. More in the presentation linked here https://lnkd.in/efutMzd9 , with some key points below. RWAs have already surpassed DeFi in terms of the total value they hold, with DeFi being the biggest trends to redefine the blockchain industry over the last 4 years. The amount of value that can be quickly turned into an RWA is in the tens of trillions, with only a very small percentage currently being in the RWA format. This includes all commodities, all real estate, all funds, and much more. Large institutions like Blackrock, Fidelity, and others are already participating in the RWA trend through tokenized funds, with many more to come. RWAs are a superior format for more secure ownership and transferability of asset via rapid transfer onchain. RWA can be purchased and transferred across different countries and their separate financial systems with less friction than the current system. Providing easier access to global liquidity, a dynamic that has helped grow cryptocurrency for years. RWAs have the ability to hold critical pieces of data that prove important things about the underlying asset much quicker and more effectively than traditional systems. Good examples are Chainlink's usage to put NAV data on-chain for large CSDs and proof of reserve about the current state of an underlying asset. RWAs are in the very early stages of creating efficiency for their assets using onchain logic. As more of a fund’s administration/operations goes on-chain, you eventually get to huge increases in efficiency with even large decreases in the costs of operating a fund. For example, the placing of NAV data on-chain at faster rates than the current system can massively speed up the timeline on which you can redeem, lowering it from months to minutes, which has a large economic benefit.