Grayscale Highlights Chainlink as Essential for Tokenized Finance

Grayscale has posited that Chainlink is poised to be a cornerstone of the upcoming shift in blockchain adoption, referring to it as the “critical connective tissue” merging cryptocurrency with conventional finance.

In a recent report, Grayscale articulated that Chainlink (LINK) is steadily establishing itself as essential infrastructure for tokenization, cross-chain settlement, and the ongoing transition towards digitizing real-world assets on blockchain.

Grayscale remarked, “A more accurate description of Chainlink today would be modular middleware that lets on-chain applications safely use off-chain data, interact across blockchains, and meet enterprise-grade compliance needs.”

This expanding influence has propelled LINK to become the largest non-layer 1 cryptocurrency by market capitalization (excluding stablecoins), offering investors access to a broader array of ecosystems instead of just one.

Chainlink’s Role in Tokenization Emergence

Grayscale highlighted that tokenization presents the most straightforward avenue for Chainlink to demonstrate its value. Currently, most financial assets, including securities and real estate, are documented on off-chain ledgers. To benefit from the efficiency and programmability that blockchains offer, these assets need to be tokenized, verified, and linked to external data sources.

“We expect Chainlink to play a central role orchestrating the process of tokenization, and it has formed several partnerships, including with S&P Global and FTSE/Russel, to facilitate this,” they stated.

The market for tokenized assets has expanded significantly, growing from $5 billion to over $35.6 billion since early 2023, as per RWA.xyz.

Total RWA onchain. Source: RWA.xyz

Chainlink, JPMorgan, and Ondo’s Crosschain DvP Settlement

In June, Chainlink, JPMorgan’s Kinexys network, and Ondo Finance finalized a crosschain delivery-versus-payment (DvP) settlement connecting a permissioned bank payment system with a public blockchain testnet.

This test linked Kinexys Digital Payments (JPMorgan’s restricted payment network) with Ondo Chain’s testnet, which focuses on tokenized real-world assets. Utilizing Chainlink’s Runtime Environment (CRE) as the coordination layer, the settlement exchanged Ondo’s tokenized US Treasurys fund, OUSG, for fiat without the assets leaving their original chains.