- Chainlink’s (LINK) co-founder has disclosed that market dynamics and efficiency benefits have been the two major driving forces of institutions going on-chain.
- He disclosed that blockchain adoption has been hindered by unfounded negative claims about the technology and crypto.
Co-founder of Chainlink (LINK), Sergey Nazarov, has in his latest appearance on the New Era Finance Podcast, spoken about several topics within the ecosystem, including the ongoing adoption of on-chain protocols, the “game theory” behind the institutional investment in crypto and Decentralized Finance (DeFi), and much more.
Details of the Interview with Chainlink’s Co-founder
Speaking about the growing institutional adoption of blockchain-based concepts such as tokenization, Nazarov noted that there are two primary driving forces, one of which is market dynamics. Per his observation, there is a demand among institutions for anything that can be tokenized. Apart from this, efficiency benefits have also been a driving force.
In traditional markets, the weekend is the Weekend. There is no market. And collateral management is not as good as that. Collateral management happens on a schedule of 21 hours and five days a week.
Speaking on efficiency, Nazarov explained that this could only be proved when there are enough assets on-chain. He further spoke about the GENIUS ACT, which has been predicted to lead to a “boom in stablecoins and tokenized deposits.” According to him, this creates a market that can easily buy tokenized assets.
Apart from the legislation, there is ongoing work on the market structure, which he believes could encourage more institutions to get their tokenized assets on-chain.
Adding to this, Nazarov noted that everyone he knows does not like the traditional market. Meanwhile, widely speculated negativities have impeded blockchain and crypto adoption globally.
On the liquidity side, the Chainlink co-founder explained that liquidity from Web3 and crypto has helped institutions to decide on some early tokenization initiatives. He also disclosed that some people in Web3 have been trying to do Real World Asset (RWA) tokenization; however, that is not their expertise. To him, their expertise is creating DeFi and markets.
Concluding his remark, Nazarov highlighted that Chainlink’s work with some of these institutions over the years has accelerated their abilities to go on-chain. With Chainlink’s work with JPMorgan, for instance, he pointed out that they connected their private payment chains to a public chain. In this case, clients of the JPMorgan’s private chain could use tokenized funds from the public chain’s.