Grayscale is positioning Chainlink as critical infrastructure for the growing tokenized asset market, according to a new research report.
The asset manager’s research arm maintains that Chainlink’s suite of services, which encompasses real-world data sources, compliance tools and blockchain interoperability, resolves many of the real-world frictions blocking broader adoption of blockchain-based finance.
Chainlink is best known for powering “oracles,” which feed off-chain data, such as asset prices, to smart contracts. But its new offers go much further. The Cross-Chain Interoperability Protocol (CCIP), for example, allows tokens and messages to move between chains, something that was highlighted during a test with Kinexys and JP Morgan’s Ondo Finance.
Grayscale views Chainlink’s LINK token as offering diversified exposure to the infrastructure layer of cryptocurrencies, according to the report. “Chainlink is the critical connective tissue between cryptocurrencies and traditional finance,” the report says. “It can already be considered an essential infrastructure in blockchain-based finance.”
The report puts the tokenization market at $35 billion today, still a fraction of the global asset base, but notes that Chainlink’s integration with the likes of S&P Global and FTSE Russell puts it in a strong position as traditional exchanges explore on-chain solutions.
Currently, Grayscale added, the total market for tokenized assets represents only 0.01% of the total value of global fixed income and equity securities. The growth of the tokenized asset market, the company added, could “involve growth” in demand for Chainlink’s offerings.
While still small relative to global capital markets, the firm expects the figure to grow as banks, asset managers and data providers explore the rails of blockchain. It has already increased from around $5 billion in early 2023 to its current figure.
The report comes as Grayscale filed to convert its $29 million Chainlink Trust into an exchange-traded fund that would trade under the symbol GLNK on the NYSE Arca. If approved, it would be the first Chainlink ETF to list in the US and one of the first with a staking component.