Grayscale Calls Chainlink ‘Essential Infrastructure’ for Tokenized Finance in New Research

Grayscale is positioning Chainlink as critical infrastructure for the growing market of tokenized assets, according to a new research report.

The asset manager’s research arm argues that Chainlink’s suite of services, spanning real-world data feeds, compliance tooling, and blockchain interoperability, solves many of the real-world frictions that block wider adoption of blockchain-based finance.

Chainlink is best known for powering “oracles,” which feed off-chain data like asset prices to smart contracts. But its newer offerings go much further. The Cross-Chain Interoperability Protocol (CCIP), for instance, allows tokens and messages to move between chains, something that came into focus during a test with J.P. Morgan’s Kinexys and Ondo Finance.

Grayscale sees Chainlink’s LINK token as offering diversified exposure to crypto’s infrastructure layer, per the report. “Chainlink is the critical connective tissue between crypto and traditional finance,” the report rsaid. “It can already be considered essential infrastructure in blockchain-based finance.”

The report pegs the tokenization market at $35 billion today, still a fraction of the global asset base, but notes that Chainlink’s integration with firms like S&P Global and FTSE Russell puts it in a strong position as traditional markets explore on-chain solutions.

Currently, Grayscale added, the total market for tokenized assets represents just 0.01% of the total value of global fixed income and equity securities. The growth of the tokenized assets market, the firm added, could “imply growth” in demand for Chainlink’s offerings.

While still small relative to global capital markets, the firm expects the figure to grow as banks, asset managers, and data providers explore blockchain rails. It’s already grown from around $5 billion in early 2023 to its current figure.

The report comes at a time when Grayscale has filed to convert its $29 million Chainlink Trust into an exchange-traded fund that would trade under the ticker GLNK on NYSE Arca. If approved, it would be the first U.S.-listed Chainlink ETF and one of the first with a staking component.