Chainlink Attracts Trillion-Dollar Giants through tokenization

• Chainlink is disrupting the tokenization terrain with an easy-to-adopt interoperability protocol.
• The oracle service’s push in tokenization can drive its native coin’s growth in the near future.

Chainlink (LINK) is billed to play a crucial role in supporting the capital market through its core infrastructure that tackles the challenge of tokenization from the Proof-of-Concept (PoC) phase to the production stage. Since 2017, capital market players have embraced tokenization. To date, many have maintained a position in the PoC stage with the core focus for most firms being the tokenization of traditional assets like bonds. 

According to a Chainlink blog post, this tokenization was usually focused on the initial issuance phase. Those who ended up successful like the Broadridge DLR and HQLAx, were usually specific to a particular application and managed by a single centralized entity that supervises the entire technology processes. In both cases, there was friction as a result of an absence of seamless connectivity across the different ecosystems and applications.

Owing to this challenge, many asset managers and owners who displayed enthusiasm towards creating liquidity were forced to step back. For their full and active participation, it was necessary for these industry players to have access to a robust interoperability enterprise-grade infrastructure. This is required to enforce the connection that is needed for a secondary market.

Chainlink is an enterprise-grade infrastructure provider that facilitates connectivity, including bidirectional communication between blockchains as well as external systems. 

One of the core tokenization use cases where these capital markets will be able to utilize the Chainlink protocol is the synchronization of both off-chain and on-chain systems. This sync is achieved by supporting the communication between legacy infrastructure and blockchain. Chainlink will also play a part in facilitating Delivery vs. Payment (DvP) workflows with cash or deposit tokens.

Here, a single-chain or cross-chain atomic transaction is performed which then eliminates trade failure. The process of expelling the trade failures involves making sure that there is an irrevocable exchange of assets across the different blockchains. Secondary markets are able to settle on any blockchain of their choice which could either be private or public. This is because Chainlink enables secondary markets for tokenized assets.

Chainlink Proffer Blockchain Connectivity Solutions

Earlier in October, Crypto News Flash reported the expansion of Chainlink’s Cross-Chain Interoperability Protocol (CCIP) which contributes immensely to the seamless transfer of tokens between various blockchains including facilitating cross-chain lending activities. The CCIP system leverages mechanisms like lock-and-mint or burn-and-mint to promote blockchain connectivity. 

Apart from connectivity and interoperability, Chainlink also offers certain computational services for privacy, automation, and other functions. In addition to these functionalities, the LINK token has been performing relatively well in the last few months. Last week, the coin recorded up to a 50% price surge amidst an industry-wide bear market. This triggered a break in the $10.80 resistance level, marking a milestone.

All of these functionalities have caused uproar amongst investors with many of them indicating interest to partner with the protocol. Chainlink’s most recent collaboration is with Vodafone Digital Asset Broker (DAB) which became a node operator on the network.

This broader outlook of its ecosystem can bolster the growth in the price of LINK in the near future.

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