Sergey Nazarov, the co-creator of Chainlink, a blockchain oracle service, predicts that real world assets (RWAs) will become a prominent trend in the digital asset space. Nazarov, who has a following of 150,000 on X, a social media platform, believes that tokenizing assets in traditional markets such as real estate, loans, and bonds on the blockchain will be the next big thing in the industry.

According to Nazarov, the value of RWAs that can be quickly turned into tokens is in the tens of trillions, but only a small percentage of these assets are currently in tokenized form. He points out that large institutions like Blackrock and Fidelity are already participating in the RWA trend through tokenized funds, and expects many more to join in the future.

Nazarov emphasizes that on-chain RWAs offer a superior format for secure ownership and transferability of assets. They can be purchased and transferred across different countries and financial systems with less friction compared to traditional infrastructure. Furthermore, they provide easier access to global liquidity, which has been instrumental in the growth of the cryptocurrency market.

One of the advantages of RWAs, according to Nazarov, is their ability to hold critical data about the underlying asset more efficiently than traditional systems. For instance, Chainlink’s usage of on-chain logic can facilitate the quick verification of net asset value (NAV) data for large central securities depositories (CSDs) and proof of reserve for the current state of an asset. As more of a fund’s administration and operations are conducted on-chain, there will be significant improvements in efficiency and cost reduction.

Nazarov gives an example of how placing NAV data on-chain can expedite the redemption process from months to minutes, resulting in substantial economic benefits. He concludes by stating that RWAs are still in the early stages of leveraging on-chain logic to create efficiency for their assets.

It is important to note that the opinions expressed in this article are not investment advice, and investors should conduct their own research before making any high-risk investments in Bitcoin, cryptocurrency, or digital assets. Transfers and trades are done at the individual’s own risk, and any losses incurred are their responsibility. The Daily Hodl does not endorse the buying or selling of cryptocurrencies or digital assets, nor does it provide investment advice.