The next level of Tokenization requires the integration of real world data – Chainlink

Researchers at blockchain oracle platform ChainLink believe asset managers have a “huge” opportunity to jump into tokenization as financial asset infrastructure continues to go digital.

In an industry report, “Beyond Tokenization,” blockchain oracle platform Chainlink explains where the opportunity lies and how interoperability and real-world data can unlock the value of tokenized assets.

The report outlines the benefits of tokenization for asset managers. This includes unlocking dormant capital, providing greater access to resources and creating new revenue models.

In addition to these, Chainlink says that asset managers can create integrated client portfolios, diversify their service offerings and improve risk management as tokenization allows for more automated risk assessment.

In the report, Chainlink also argued that blockchains continue to evolve into “an integral part of the existing financial ecosystem.” The company also highlighted that traditional and blockchain-based assets are already merging into one financial ecosystem.

Researchers believe this comes from continued digitization, as blockchains provide an advanced infrastructure for asset storage and transactions.

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Ryan Lovell, director of capital markets at Chainlink Labs, told Cointelegraph that tokenization has been in the research and development process for several years.

Lovell explained that the institutions were bringing simple ledgers on-chain and were only trying to understand the impact of tokenization on their businesses at a basic level. Lovell said:

“It was like building a concept car without an engine or an interior – it's a basic shell of what the future holds.”

However, the executive believes the next phase will be more about building basic infrastructure. This is important to make tokenized assets scalable and scalable across traditional systems and private and public blockchains.

Meanwhile, the Chainlink executive believes that augmenting tokens with real-world data and allowing them to interoperate with blockchain and traditional systems could open up powerful applications.

Lovell says these use cases feature greater transparency, lower costs and streamlined administrative processes than traditional financial infrastructure.

“We are currently actively working on a number of exciting initiatives to enable institutions to move beyond tokenization, manage tokenized assets throughout their lifecycle and operate in a cross-chain economy,” Lovell added.

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