- The co-founder of Chainlink (LINK) has revealed that market dynamics and efficiency gains have been the two main driving forces behind institutions going on-chain.
- He revealed that blockchain adoption has been hampered by unfounded negative claims about the technology and crypto.
Chainlink (LINK) co-founder Sergey Nazarov, in his latest appearance on the New Era Finance Podcast, discussed various topics within the ecosystem, including the continued adoption of on-chain protocols, the “game theory” behind the institutional investments in crypto and Decentralized Finance (DeFi), and much more.
Details of the interview with the co-founder of Chainlink
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. According to his observation, there is a demand among institutions for anything that can be tokenized. In addition, efficiency benefits have also been a driving force.
In traditional markets, the weekend is the weekend. There is no market. And the collateral management is not that good. Collateral management takes place according to a schedule of 21 hours, five days a week.
Speaking of efficiency, Nazarov explained that this can only be proven if there are enough assets in the chain. He went on to talk about the GENIUS ACT, which is predicted to lead to a “boom in stablecoins and tokenized deposits.” According to him, this creates a market that can easily purchase tokenized assets.
Beyond the legislation, there is ongoing work on the market structure, which he said could encourage more institutions to get their tokenized assets on-chain.
In addition, Nazarov noted that everyone he knows does not like the traditional market. Meanwhile, widespread negativities have hindered blockchain and crypto adoption worldwide.
On the liquidity side, the Chainlink co-founder explained that Web3 and crypto liquidity helped institutions decide on some early tokenization initiatives. He also revealed that some people in Web3 have tried to do Real World Asset (RWA) tokenization; however, that is not their expertise. For him, their expertise creates DeFi and markets.
Concluding his comment, Nazarov emphasized that Chainlink’s work with some of these institutions over the years has accelerated their ability to go on-chain. For example, with Chainlink’s work with JPMorgan, he pointed out that they connected their private payment chains to a public chain. In this case, customers of JPMorgan’s private chain would be able to use tokenized funds from the public chain.