According to Cointelegraph, the value of tokenized real-world assets (RWA) is expected to exceed that of cryptocurrencies on Web3 in the coming years, as stated by Chainlink co-founder Sergey Nazarov during his keynote presentation at TOKEN49 in Singapore on September 18. This influx of value from traditional finance (TradFi) is anticipated to significantly transform the blockchain industry.
Nazarov emphasized the importance of preparing for this shift, noting that TradFi will become the largest customer of decentralized finance (DeFi). He highlighted Chainlink’s Cross-Chain Interoperability Protocol (CCIP) as a pivotal component in the emerging Internet of Contracts, which aims to connect central bank digital currencies, asset chains, consortium chains, and public blockchains.
The Chainlink oracle network, which already supports the majority of DeFi, has facilitated $15.49 trillion in transaction value since 2022. For TradFi to effectively utilize blockchain technology, it requires access to various types of data, including live data, to ensure the proper functioning of smart contracts. Additionally, cross-chain connectivity is essential. CCIP enables users to perform delivery-versus-payment transactions using stablecoins without needing to integrate numerous chains. This allows value and data to be included in a single transaction through programmable token transfers, where tokens can be wrapped in instructions to trigger specific events upon reaching their destination.
Nazarov also addressed the need for a unified set of standards for such transactions, despite TradFi's reliance on decades-old systems. He cited the SWIFT network as an example of a large user base operating on a single standard. The challenge lies in enabling the TradFi ecosystem to utilize blockchain technology in a way that allows value from their systems to flow onto various blockchains and eventually into DeFi.
Furthermore, Nazarov mentioned that legal barriers between TradFi and Web3 are gradually diminishing, particularly in regions like Asia and the Middle East. Once these obstacles are fully addressed, trillions of dollars are expected to flow into Web3.
