The Depository Trust and Clearing Corporation (DTCC) has joined forces with Chainlink, a renowned blockchain oracle, and several leading US banking institutions. The objective of this collaboration is to expedite the process of tokenizing funds, a move that has the potential to revolutionize the traditional asset management sector.
This partnership has not only opened up new avenues for the integration of blockchain technology into conventional asset management but has also triggered a substantial surge in the price of Chainlink’s native cryptocurrency, LINK. The value of LINK has soared past the $14 mark, indicating the market’s positive response to this groundbreaking initiative.
Chainlink’s Role in Accelerating Fund Tokenization
The pilot project, aptly named Smart NAV, was conceived by DTCC to extend its Mutual Fund Profile Service I (MFPS I). This service is an industry-standard platform that disseminates “Price and Rate” data, also known as “NAV data.” The pilot leverages Chainlink’s capabilities in cross-chain interoperability and blockchain abstraction to explore the potential of on-chain price and rate data. This exploration is particularly relevant to new initiatives in mutual fund tokenization.
To assess the value of a Distributed Ledger Technology (DLT)-based price and rate dissemination solution, DTCC collaborated with a host of asset managers, service providers, and distributors. These include American Century Investments, BNY Mellon, Edward Jones, Franklin Templeton, Invesco, JPMorgan, MFS Investment Management, Mid Atlantic Trust, and State Street.
The pilot project aimed to deliver structured data on-chain, thereby enabling the embedding of foundational data into multiple on-chain use cases. The implications of this capability are far-reaching. It can support brokerage portfolio applications and facilitate real-time, automated data dissemination. Moreover, Smart NAV aims to provide built-in access to historical data and simplify the relay of price and rate data through new interfaces for data consumption.
The pilot project reportedly achieved several key milestones. These include validating user interfaces and applications that leverage on-chain data, establishing automation of data routing through smart contracts for dynamic data management, and preventing future fragmentation through Chainlink’s Cross-Chain Interoperability Protocol (CCIP).
DTCC acknowledged the pivotal role Chainlink played in the success of the Smart NAV use case. Chainlink’s cross-chain interoperability capabilities provided an abstraction layer that facilitated the seamless transmission of data across multiple blockchains. This approach eliminates the need for DTCC to establish individual connections to each blockchain, thereby reducing costs and operational complexities while ensuring data accessibility and optimization.
As of the time of the press release, the LINK token has successfully surged above the $14.88 mark, experiencing a notable 6.8% increase in price since the initial announcement. Data from CoinGecko indicates that the token’s trading volume has also seen a significant surge of 17% in the last hours, reaching a substantial figure of $400 million.
However, for LINK to recover from its 72% losses from its all-time high of $52.70 reached in May 2021, it faces two key resistance levels. These resistance walls are located at $15.18 and $17.8 respectively, before potentially moving towards the $20 mark. It remains to be seen whether the current bullish momentum will persist and further propel the price of LINK beyond these levels. This development marks a significant milestone in the journey of blockchain technology and its integration into traditional finance.
