Grayscale positions Chainlink as critical infrastructure for the growing market of tokenized assets, according to a new research report.
The asset manager’s research arm claims that Chainlink’s suite of services, which span real-world data feeds, compliance tools, and blockchain interoperability, resolve many of the real-world frictions that impede widespread adoption of blockchain-based finance.
Chainlink is best known for powering “oracles” that feed off-chain data, such as asset prices, into smart contracts. But the new product goes even further. For example, Cross-Chain Interoperability Protocol (CCIP) allows tokens and messages to move between chains. This was noted during testing with JP Morgan’s Kinexys and Ondo Finance.
According to the report, Grayscale views Chainlink’s LINK token as offering diversified exposure to the infrastructure layer of cryptocurrencies. “Chainlink is a key connective tissue between cryptocurrencies and traditional finance,” the report states. “This could already be considered essential infrastructure in blockchain-based finance.”
The report pegs the current size of the tokenization market at $35 billion, a fraction of the global asset base, but notes that Chainlink’s integration with companies such as S&P Global and FTSE Russell puts Chainlink in a strong position as traditional markets seek on-chain solutions.
Currently, the total market for tokenized assets is only 0.01% of the world’s total fixed income and equities, Grayscale added. Growth in the tokenized asset market could “suggest growth” in demand for Chainlink’s products, the company added.
While still small compared to global capital markets, the company expects this number to grow as banks, asset managers and data providers explore blockchain rails. It has already increased from about $5 billion at the beginning of 2023 to the current figure.
The report comes as Grayscale filed to convert its $29 million Chainlink Trust into an exchange-traded fund trading under the ticker GLNK on NYSE Arca. If approved, it would be the first U.S.-listed Chainlink ETF and one of the first to have a staking component.
