Does anyone care about Chainlink?

Once upon a time, there was a decentralized service provider with such an impressive use case that it looked to completely change the world as we knew it.

Its potential was so vast that an army of degens formed around it in one of the greatest cults known to crypto. But what happened?

Truth be told, those poor Link Marines have certainly had it rough the past few years, if they still exist at all?

Real believers in the tokenization of the universe, only to be aggressively dumped on by the very team they thought would bring them glory.

The question now is whether anyone even cares what Chainlink is doing. And if the answer is yes, what is the latest on the Chainlink frontlines?

Well, as it happens, the bearded cult leader in his flannel shirt looks to be making some moves that could potentially breathe new life into the hopes and dreams of the beaten and bruised Link Marines.

The quest for a global tokenization takeover continues.

Before we dive into the details, let’s first begin with a short history lesson.

A brief history of Chainlink

The Chainlink network was launched in June 2017 by Sergey Nazarov and Steve Ellis. The whitepaper went live a few months later in September.

Shortly after the whitepaper was released, the Chainlink ICO was launched. The sale of 35% of the one billion total $LINK supply raised $32 million.

With its launch, crypto nerds around the globe quickly realized its potential and began to envision a future where everything would call the blockchain home.

The memes began to flow, and the Link Marines were born.

As a decentralized oracle network, its goal is to provide a way to bring real-world data onto any blockchain and, in doing so, allow large institutions and enterprises to tokenize anything they wish.

In their own words, they are “the universal platform for pioneering the future of global markets on-chain.”

This is a big deal and has always been a bit of a crypto “end game.”

It didn’t take long for the partnerships to start rolling in.

Some of the biggest included the SWIFT payment system, T-Mobile, AWS, Vodafone, NBA, multiple large banks, and basically every crypto protocol in existence.

To date, Chainlink has enabled over $12 trillion in transaction volume.

The reason for its success is pretty simple. The world is built on a bunch of promises kept on paper, and many of these promises are never fulfilled.

Chainlink turns these half-assed promises into cryptographically secure versions that are guaranteed by code, creating a higher trust environment for everyone.

It uses smart contracts to bring data from outside the world of blockchains onto the chain, thereby allowing protocols to access real-world data in a verified, secure way.

This is a big deal, as any protocol that needs to use off-chain data must have a way of ensuring that the information it is using is accurate, or it will face severe consequences.

Using Chainlinks services, you can do everything from data streams to real-time price feeds, proof of reserves, API connections, random number generation, and so much more.

It truly is the Swiss army knife of the crypto world, and it’s no wonder it dominates more than 80% of the total Oracle market share.

How does it all work?

The inner workings of the Chainlink Oracle service are actually not that hard to understand. It consists of five different contract types.

The first of these contract types is the Requesting Contract. Simply put, when someone needs data on-chain, this requesting contract sends out a request for that data and retrieves the data from wherever it lives.

Next up is the Service Level Agreement contract. This is basically a receipt for the request made and is made up of three different sub-contracts.

Sub-contract number one is the Reputation Contract. This contract verifies the legitimacy of the data provided and its historical performance before allowing it on-chain. If the data does not pass the legitimacy test, it is discarded, and a different data source is found.

The Order Matching Contract collects the bids from Chainlink nodes that verify the data and allocate a number of nodes to any particular request. The more important the request, the more nodes can be used to verify it, therefore increasing the reliability of the data provided.

Finally, we have the Aggregation Contract, which reviews all of the data provided and verifies the results before using it.

Obviously, there is a lot more baked into the Chainlink tech than what we have covered here, but this is sufficient to give a low-level overview of what goes on under the hood regarding Chainlink’s oracle services.

Alright, now you have a bit of background on the Chainlink protocol and how it works, you’re probably wondering why we are talking about it in the first place.

Tokenization of Real World Assets is becoming a major talking point for large institutions.

Everyone’s favorite lizard man, Larry Fink, has been throwing the tokenization word out there in almost every interview he has done recently, and it's not just a coincidence.

Chainlink has been making some interesting moves to increase its tokenization services, and these improvements warrant some coverage. After all, the tokenization of RWAs has already surpassed DeFi in dollar amounts of total assets and doesn’t look to be slowing down anytime soon.

Chainlink Digital Assets Sandbox (DAS)

The Chainlink Digital Assets Sandbox is one of the latest innovations made by Chainlink Labs and is powered by Chainlink’s Cross-Chain Interoperability Protocol (CCIP).

Its purpose is to accelerate the adoption of digital asset tokenization by large financial institutions so they can seamlessly bring whatever they wish on-chain.

This new sandbox will allow these big boys to play around and experience the realities of new revenue streams by tapping into the liquidity held in the crypto world. It will give them a way to bring their products to market much faster than ever before.

The deployment of services within the sandbox comes with the support and consultancy of the Chainlink Labs team, allowing these financial institutions to launch digital products in a mere matter of days.

The digitization of bonds is likely to be one of the first products to come to fruition via this sandbox tech.

This will be done by turning these bonds into digital tokens that can be traded like any other asset is trading across various blockchains.

In the past it has proved very difficult for these boomer-ridden, traditional finance firms to get their heads around the ins and outs of blockchain technology.

The Chainlink DAS provides them with a simple solution that doesn’t require any specific blockchain knowledge to utilize. This increases the speed of deployment and reduces the costs involved.

As with any sandbox, it gives these firms an environment in which to experiment with digital products and conduct on-chain trials in a pre-configured environment with built-in use cases, different deployment models, a simple user interface, and all fully customizable to suit the needs of a variety of institutions.

It also allows firms to collaborate and launch digital products together, opening up a world of endless on-chain possibilities.

For a detailed overview of the Digital Assets Sandbox and its capabilities, check out this recent article from the Chainlink Labs team.

Sygnum/Fidelity partnership in Net Asset Value data

The next big move by the Chainlink Labs team is a partnership with Fidelity International and Sygnum Bank to bring Net Asset Value (NAV) data on-chain.

This all comes after Swiss-based Sygnum Bank, specializing in digital asset banking, tokenized $50 million of Matter Labs’ treasury reserves onto the zkSync blockchain.

These digital tokens represent “proof-of-reserves” for Matter Labs in units of Fidelity International’s Institutional Liquidity Fund (ILF), which is worth just shy of $7 billion USD.

This is just the first step made by Matter Labs to bring their entire treasury reserve on-chain via Sygnum’s multi-chain tokenization solution and as time goes on it can be expected that other traditional finance firms will follow in their footsteps.

Net Asset Value data is very important in traditional finance, and providing a way to accurately bring this information on-chain is a huge step forward in onboarding the world of tradFi into the blockchain arena.

Thanks to the Chainlink tech, this NAV data can be shared across any blockchain network, public or private, and be updated in an accurate, reliable fashion.

This is a big leap forward in an industry that is still living in the stone age when it comes to technical innovation, and it proves that the future of finance will really live on the blockchain.

As Sergey himself stated: “Fund tokenization is likely the largest digital asset trend happening today, and it’s a large confirmation that global asset management firms are entering this growing market.”

Bullish af!

Closing thoughts

TradFi big dogs Northern Trust and HSBC estimate that around 10% of all assets will be digital by 2030, and the total tokenized asset market will reach upwards of $16 trillion, making up 10% of the global GDP.

These are some pretty impressive numbers, and once big firms start to see the inherent advantages of tokenizing assets, the snowball will start to build momentum in an exponential fashion.

However, for the poor Link Marines, one question remains to be answered: Will the $LINK price go up?

This is a tough one to answer.

Chainlink has already formed some huge partnerships across both web2, and the crypto sphere, and the $LINK token itself has seen nothing but lackluster performance.

It is one of those protocols that begs the question of whether a token is needed at all outside of the obvious use case of team dumping to fund further innovation.

For this reason, Chainlink truly is the embodiment of “in it for the tech” until proven otherwise.

One thing is for sure, though: tokenization of real-world assets has been a hot topic over the past few months, and it’s coming fast.

We may soon live in a world where you can buy fractional shares of everything on-chain, allowing you to rug the value of your next-door neighbor's house when his dog shits on your lawn.

The possibilities really are endless…