.@chainlink doesn’t tokenize assets. So why is everybody relating Chainlink to real-world asset (RWA) tokenization? It’s actually quite simple: The Thesis: Let’s start with a baseline hypothesis: There will be many, many blockchains in this world. In the public blockchain world, we already have layer 1s, layer 2s, layer 3s, zk/optimistic rollups, sidechains, appchains, subnets, supernets, and more. In the private blockchain world, we have individual companies creating their blockchains to make their own operations more efficient (more on this later). Citi, JPMorgan, ANZ … the list goes on and on—and is continuing to get bigger. Fun stat: 97% of institutional investors think that blockchain will revolutionize asset management processes. That’s why there will be so many private blockchains. If you agree with this thesis, you should look into Chainlink. If you don’t, you probably have a “one-chain (or layer-1) to rule them all” outlook on Web3. I think that’s wrong, but we can part ways here and see who’s right in the future. The Problem: Tokens are created on blockchains, period. This is where the difference between tokenization (as a simple one-and-done memecoin) and real-world asset tokenization becomes very important. In crypto, a native token is often equal to the asset. 1 Dogecoin = 1 Dogecoin. The same is not true for a token like a stablecoin (which is the first entry point for many financial institutions). 1 stablecoin doesn’t always equal 1 dollar, but a dollar's worth of value. There are reserves of the actual asset (dollars) or other types of collateral (crypto-native, T-bills, etc) backing the stablecoin. Your stablecoin’s value is dependent on the value and liquidity of the actual reserves. This is maybe the most important nuance to understand in order to navigate real-world asset tokenization: Always understand what the token represents in reality. But then that leads to another natural question: How do you know what’s backing a token? Answer: You can’t. Because there’s no native connectivity between blockchains and the outside world. The asset behind a real-world asset? That’s in the outside world. But let’s go even further than that. Let’s say a bank has created a tokenized asset that represents a real-world asset on its own private blockchain. Now what? Well, they’d want to sell that tokenized asset. That’s the business of banks and capital markets: package assets into different formats, with different yields and different specifications, and then sell that asset to someone. Maybe it’s another bank, maybe it’s a hedge fund. Doesn’t matter because there’s a wild range of counterparties out there. But they need access to counterparties. Again, that’s the business of finance: selling assets you make, buying assets you didn’t make. So what good is tokenization if you can’t sell those tokenized assets? All those efficiencies and cost-savings mean literally nothing. But it turns out, banks can’t access counterparties because, again, their blockchain can’t access the outside world. Unless they have one of two things: 1. Their counterparty on their blockchain. 2. Connection between their blockchain and their counterparty’s preferred blockchain/system. This is where the hundreds of chains become relevant again. Yes, it’s possible that a single bank will have a single, or even multiple, blockchains where all the other banks go to be counterparties. Is it likely? No, because blockchains are useful for aligning internal operations and asset flow in internal systems (which requires their own blockchain), and also because they wouldn’t want to cede that kind of power and control over the platform to another group of validators. That’s why we’ve seen consortium blockchains, but even those have their limits to how many banks you can attract. How about multiple consortiums for different geographic regions? Well, we’re back to the hundreds of blockchains, and that’s only the private chains. So #1 is unrealistic, and even if it plays out, you’ll have at least tens, if not hundreds or thousands, of megachains. Then you have #2: Connecting different blockchains, and blockchains to external systems, through a cross-chain solution—because not everyone has a blockchain, but they might want access to tokenized assets on another blockchain. This seems to be the route that makes the most sense. The Solution: Well, I’m obviously going to say Chainlink CCIP is the cross-chain solution, but I want to explain the why because that’s the most important part. The first reason is that CCIP is secure. Secure in a way that other cross-chain solutions aren’t secure. Not when you’re aiming to underpin millions, billions, trillions, and even quadrillions of dollars worth of transactions. If there’s one takeaway you get from this section, it’s that security is king when it comes to cross-chain. And Chainlink leads in this category both by virtue of being reliable and secure for years on end, and due to the addition of a third network known as the Risk Management Network. There are a lot of resources out there on why CCIP security is so good, but I’d recommend the five levels of cross-chain security blog: The second reason is that Chainlink can provide a range of supporting solutions to tokenized real-world assets. Remember that every tokenized RWA needs to be backed by the actual asset. Chainlink Proof of Reserve can bring that reserve data onchain, proving to counterparties that the token is actually backed. So now I’m a counterparty and I know this asset is backed. This is the bare minimum. But the asset needs a bunch of data past proof of reserves. Is it a globally liquid asset? Great, what price are we going to use? Maybe a decentralized, volume-weighted price set up by a credibly neutral entity—i.e., Chainlink DONs and Chainlink Data Streams. Simply put, as the asset flows across multiple cross-chain transactions between many bankchains, every party wants to know who made the asset, what price the asset trades at, and what the asset entails (what’s the yield? Who is the underlying counterparty? What assets are being packaged? Who owns each of these original assets/liabilities? Etc.) In essence, the Chainlink platform provides a full suite of services that enrich and update the critical data necessary for tokenized RWAs to function at scale. Each service has the best security in Web3, is built to scale, and puts minimal work on the side of institutions to actually use (this is insanely important). Combine all of those, and you have a solution that banks actually want to use, can scale in security with their needs, and provides a logical, low-cost path to plugging into the larger economy of blockchains that will inevitably appear.

@travdet hopefully they’re actually good

@DeeZe bruh 💀 what is the context behind this video

@ProofOfTravis just not sure how to expand this to be integrated “everywhere” games are good use case perhaps, but where else?

@FaridRached ai in avalanche will go hard (already is)

all these tariffs but no word on deleting income taxes ive been scammed

@ProofOfTravis I don’t think that’s necessarily a use case In what context do you interact with these ai agents? That’s the use case to me

@CatfishFishy wait this is kinda cool

can never be bearish if you know what’s coming either you believe in the tech or you don’t those who still think crypto as a whole is a fad are ngmi

@JryannSG @WolvesDAO zero hate and open discourse You love to see it

@0xLaxo @playcambria looks fire regardless, nicely done man

@CryptoKaleo avax criminally undertalked about

@ChrisBarrett loving the all caps era

@AxieAur Rocky!!!

@Fiskantes nothin else so far 😂 lack of legitimate apps is criminal but I think defai is a fundamentally sound idea, i think it’ll spawn the next big app

@eeelistar $12,000/month? That’s wild

RT @0xNairolf: every time a chain feels hard to reach, take it as a reminder of why chain abstraction matters it should all feel like a si…

someone build a @chainlink cross-chain @pumpdotfun that deploys ccts imagine the liquidity