- ChainLink is a distributed Oracle network that is an essential infrastructure for making tokenization secure, scalable and reliable.
- Tokenization allows direct trading of stocks on the blockchain, eliminating the need for intermediaries and market time, and providing 24/7 access.
Tokenization is the process of transforming real-world assets such as stocks, real estate, gold, and even art into digital tokens that live in blockchain. Each token represents a share of ownership of that asset, and when tokenized, it becomes much more flexible.
For example, instead of buying $1,000 for private investments, you could buy $50 in token format. This token can be traded, transferred or used in a blockchain-based financial app, making it accessible, efficient and open to anyone with an internet connection.
This week, Crypto News Flash reported that ChainLink is ranked as the leading network for real asset tokenization by Santimet, a financial market data and content platform. And why is ChainLink the most mentioned name in tokenization? Let’s take a look.
1. The market is tired of banking time
Have you ever tried to buy or sell shares on a Friday after 4pm? Good luck. Traditional markets have severe trading times and payment times are slower. On-chain trading on ChainLink is changing all of that.
Tokenized inventory can be traded 24/7, just like crypto. And instead of waiting for the deal to settle, it can happen instantly, sometimes within seconds. ChainLink helps to connect blockchains to traditional data and enable this with real-time price feeds and infrastructure that provide accurate price data.
2. Borderless Investment
Tokenized stocks open the door to global investment. No longer have to worry about brokerage accounts or currency conversions just to buy US stocks. Whether you’re anywhere, in Nairobi, New York or elsewhere, you can now own a real company with just a few clicks. It’s easy, affordable and open to everyone.
Thanks to platforms like Xstocks, anyone can invest in real stocks directly from their phones or laptops. No flashy setup or insider access is required.
3. Hello Automation
The presence of intermediaries, brokers, clearing houses and custodians in traditional finance always adds a layer of extra charges, delays and complexity. To solve this, smart contracts use automated code that runs the process instantly and safely without intermediaries.
ChainLink launched Cross-Chain Interoperability Protocol (CCIP) in 2023. Tokenized assets can move across different blockchains and support programmable transfers, allowing delivery and payment to occur simultaneously in one seamless transaction.
4. Trust and transparency
One of the first questions people ask about tokenized assets is, “Are they actually real?” That’s quite a concern. That’s why ChainLink’s backup proof is in place. Whether investors or regulators, it provides the ability to check the chains that are real, verifiable assets fully support those tokens.
And when it comes to complying with financial regulations, ChainLink is covered. An automated compliance engine (ACE) helps ensure that only the right people have access to a particular asset based on their identity, location, investor status, and more. It all happens in real time across multiple blockchains, keeping the tokenized market safe and legally hearing from scratch.
5. DefiComposability
Tokenized stocks are programmable assets with actual utilities. Once they’re on the chain, you can do more than hold them. You can use them as collateral for defi and wager them to earn rewards, exchange them instantly, or plug them into your automated trading strategy. It is ChainLink’s CCIP that makes all this possible, connecting these assets over various blockchains.
This means that tokenized inventory issued on Ethereum (ETH) could be used in Avalanche (Avax) lending app or traded on Arbitrum’s Dex. This further reduces interoperability and liquidity portability. Already, ChainLink is doing this by working with Swift, DTCC and key asset managers.
They already run real-world tokenized inventory pilots on platforms like 21x and Aktionariat, which will help shape the future of how financial assets move and operate in chains.
