Chainlink’s co-founder Sergey Nazarov recently shared his thoughts on the real-world asset industry and how it can eventually surpass the crypto market size. Sergey also believed that Chainlink’s technology and its widespread use in RWAs could help create an industry standard.
Sergey keyed in investment products, such as stablecoins, gold coins, and other commodity coins, such as RWAs. The Chainlink co-founder stated that all the assets can increase the potential for RWAs to bring more off-chain asset value on-chain.
Sergey had previously talked about how RWAs were overtaking DeFi in terms of total value locked. The Chainlink co-founder highlighted the trillions in USD of real-world assets that can be tokenized to increase value on-chain. Sergey insisted that only a small fraction of these assets, including real estate, treasury bills, and more, are in RWA form.
The Chainlink co-founder highlighted the efforts by large institutions, including BlackRock and Fidelity, to participate in real-world asset tokenization. Sergey also stated that with RWAs, institutions could offer a superior format for safe and transparent asset ownership with rapid transfer on-chain.
Sergey says RWAs will link TradFi and DeFi
I personally believe that the RWA industry's size can eventually surpass the cryptocurrency market as a whole. If you count stablecoins, gold coins and all commodity coins as RWAs, you already see a lot of the potential for how RWAs can continue to put even more value on-chain.… https://t.co/sBHKRu5aHz
— Sergey Nazarov (@SergeyNazarov) September 10, 2024
Sergey explained that RWAs could be the link between traditional finance (TradFi) and decentralized finance (DeFi). According to Sergey, RWAs will serve as the initial interaction point between TradFi and DeFi.
Zack Porkony, a research analyst at Galaxy, acknowledged the contribution RWAs have made to DeFi. The researcher highlighted the fast-growing presence of RWAs within DeFi, with their TVL reaching $2.5 billion as of September 30, 2023.
Chainlink’s community liaison, Zach Rynes, defined DeFi as a highly speculative market, citing Vitalik Buterin’s previous sentiments on DeFi. In late August, the Ethereum co-founder caused waves in the crypto space by terming DeFi as an ouroboros.
Zach insisted that while DeFi was not the key to mainstream crypto adoption, bringing traditional markets on-chain would achieve mainstream reach. The Chainlink community liaison also mentioned that DeFi’s infrastructure would contribute to the future of the global economy.
Some in the crypto industry remain skeptical about Chainlink
While some investors believe in Chainlink’s ability to fuel the growth of RWAs, others remain heavily skeptical about its capabilities. A standpoint for many was the dumping of $LINK by investors.
One X user commented that the only thing Chainlink is good for is more dumping from investors. The commenter highlighted the off-chain layer-2 deals, mentioning that they should be on-chain and settled using $LINK. The user insisted that in seven years, Chainlink has still not found any utility for $LINK.
Another user speculated that RWAs were the new buzzword Chainlink’s co-founder was promoting. The user pointed out that Sergey previously promoted AI, derivatives, supply chains, NFTs, and more.
Others highlighted $LINK’s negative performance, with one dubbing it one of the worst-performing coins in the crypto space. The commenter highlighted $LINK’s price plunge from its all-time high, currently near 80% below its ATH.
Some crypto enthusiasts, however, agreed with Sergey’s vision of RWAs revolutionizing DeFi and increasing on-chain value. One commenter still insisted that reliable technology was key to keeping up with RWAs’ pace.
