Why Tokenized Assets Are Crypto's Next Mega Trend with Chainlink's Zach Rynes

Transcript

tokenized assets is going to be the next mega trend of our industry. You have unbelievable trillions amount of dollars come on chain >> sort of like pushing DeFi closer to that institutional world and pulling it closer as well which is has been incredible to see for the entire industry >> if they build tokenization and then they they deploy crypto solutions that they're not going to run into any ambiguity issues that's plagued our industry for its whole existence. >> Welcome back to the rollup. I'm Robbie. >> I'm Andy. Rob and I met at the University of Florida in 2017 where we first found out about digital assets. >> We learned a lot along the way and we're bringing you face to face with the leaders of our industry.

>> Sit back, relax, and enjoy today's episode. >> Welcome back to the show, man. I I think the last time you were on the show was SmartCon. >> I got that right. Yeah, >> it was incredible, man. I I think SmartCon was one of these pivotal experiences in in the last year or maybe you've seen this uh from the rollup. We we're we're pushing and and we have this thesis that the legacy financial space is being forced to innovate. Um they're being forced to not only pay yield uh you know because stable coins are able are able to do that according to genius and maybe clarity but also neo banks fintech are kind of coming for their lunch. On the other side, DeFi, a lot of DeFi infrastructure slop has not found product market fit and and they're being

forced to kind of take a look in the mirror and say to themselves, "Hey, we've got to go out and find product market fit like a company like Chain Link." This convergence between these two worlds we think is going to end up in what we're call like these businessdriven tokens, these neo banks, these modern fintexs and and generally we're calling this category neo finance. And you know, Chainlink has been crucial to this and and uh what I was saying is that SmartCon was a pivotal moment where I think Fidelity was in the room, Black Rockck, DTCC, all of these guys were at SmartCon, but at the same time, Chainlink, like this DeFi, Goliath was the one that was putting her on this whole conference. And it and it felt like you guys were squeezing these two worlds together. Like I'm literally I I

I can just picture like these two atoms and like an atom bomb. you guys are fusing the two worlds together and like giving birth to this one new world of neo finance and you guys have done a tremendous job of this. Um I I think today I I want to talk about how chain link uh chain link's acquisition of Atlas helps to fulfill the vision that you guys are ultimately looking to achieve. Give us a sense high level what has it been like since you were last on the show um at SmartCon? give us a sense of what the vibes at Chainlink have been and then we'll we'll dig into the the nitty-gritty behind Atlas and how this helps uh Chainlink's uh positioning with SVR.

>> Yeah, definitely. And I I I got the same exact sense as you did at SmartCon where you had both the DeFi DJ and web 3 developer, you know, the the ais of the world mingling together at a Fidelity sponsored conference with Black Rockck and Swift and JP Morgan and all these employees and you know the people at these uh institutions who aren't just you know interested in web 3 and crypto and blockchains but their title is you know head of DeFi, head of crypto, head of stable coin like there actual divisions now within Dati institutions. And I think things have, you know, really only accelerated since then. We see, you know, the New York Stock Exchange announcing tokenization. Larry Frinks at Davos talking about tokenization, how it's going to change everything. Like it's it's only

accelerated. And I think that a lot of the attention on crypto is also increasing just due to the, you know, the discussions of the Clarity Act, getting the market structure bill through. Um that's going to provide a whole lot of clarity that the institutions need to feel comfortable that if they, you know, build tokenization and then they they deploy crypto solutions that they're not going to run into any legal issues or ambiguity issues that's plagued our industry for its whole existence pretty much. Once we have that market structure and that that market structure is one part of it, but it's also just the the rights and the clarity around tokenization and tokens and self-custody and wallet interfaces and like h how do you treat each entity? Once there's that clarity, I think that'll be the real

unlock. And chain link's role in this world is just providing the infrastructure and the connectivity layer that enables an institution where if they want to tokenize an asset or build a DeFi style application, they're going to need the data to power that application. They'll need identity verification. They'll need the crosschain connectivity. They'll want to be able to connect in their existing back-end systems and their existing Swift messaging standards. like they need this um this compatibility layer, this translation layer is usually how I like to think of it. And chainlink's perfectly well suited. It's already the standard within DeFi. A all these massive applications are, you know, been able to scale to the level that they have been able to get to today because they were protected by chain link data

the whole way. And chain link being already the standard within DeFi. It's very easy to translate that to Tradfi and say, "Hey, these standards are already being adopted. They've already been proven over the past half decade. You adopt these standards and you can speak the DeFi language and you can put in, you know, permissions and identity verification and all the stuff that that institutions specifically need, but it's the same data standards. It's the same infrastructure, the same protocols. And I think I think more and more of institutions are realizing they they don't need to reinvent the wheel when there's already this proven infrastructure out there. And I think I think this vision is just just accelerating.

>> Extremely well said. And and I'll just the only part I'll add here is that um in addition to tradi being able to speak the language of DeFi because you are ubiquitous. Chain link is ubiquitous with its price feeds across DeFi. Chain link you got you and Sergey you like are doing the work to go into the legacy financial world. Go to Wall Street and and speak their language. Learn their language. Adopt it. Speak it fluently. Go into DC. Do the same thing. Speak the DC language to get regulation done. So absolutely and in addition to going into that world and pulling them so it's sort of like pushing DeFi closer to that in institutional world and pulling it it closer um as well which is has been

incredible to see for the entire industry. Um and and you know you guys have not abandoned your your DeFi roots. I I think there is still very deep technical rigor and infrastructure that is taking place here. So it's not like you guys have gotten complacent. jobs not done on the infrastructure layer. You know, th this acquisition of of Atlas speaks to how invested you guys are still in the ME pipeline in SVR and and Zach, I I I think you do a tremendous job at um simplifying some of these more difficult to understand concepts for the layman because, you know, there are there there's, you know, significant community that stretches far and wide. give us give us, you know, the the quick and dirty on SVR and and and

you know, we'll we'll talk about why Atlas is so crucial uh to further chain links goals with with it. Holiday is unified crypto payments. Give your users more wherever they are. Go to holiday.xyz to never write a smart contract again. Looking for yield that stands out? Infinify gives you just that. Deposit stable coins and earn far more than the current savings rate. Infinifi is a battle tested, reliable DeFi platform that is ready to go. Head to infinifi.xyz. Trade on anything, economics weather sports crypto and more. All on couchy.com 24/7 for the world's biggest prediction market.

>> Yeah, definitely. I can provide a little bit of like a TLDDR breakdown because the Atlas acquisition is definitely, you know, you need to have a little bit of context. The the way I put it is that typically when you have a loan in DeFi and it needs to be liquidated. The way a protocol does that is it sells the collateral at a discount so that some mebot can come in buy at a discount pay down the debt and keep the protocol solvent. This is very very critical to the solveny in the health of the DeFi economy. Anytime that there's a position that needs to be liquidated, it needs to be liquidated quickly, accurately, and safely to protect all of DeFi. uh in order to incentivize liquidations protocols will pay uh a liquidation bonus which is this discount and that

money typically gets kept by MEV bots and L1 validators and a lot of this liquidation me as it's called gets leaked over the years I think the number is about 300400 million over the past few years has been leaked now this value these protocols are purposely paying for liquidations to happen it's really important but it's expensive I mean that's a lot of money that you're leaking out to these third parties who are keeping this value. So what chainlink SVR is designed to do is that it's effectively an extension of chain link price fees. So when a loan needs to get liquidated, what typically happens is that a chain link price feed will update. It'll say that the price of ETH is now, you know, two 5% lower than it was before. This position is now marked for liquidation. And typically this

auction of who gets to liquidate the position happens on a blockchain and the blockchain validators and mebot keeps the profit. And what SVR does is that it shifts the the landscape such that rather than the who gets to who gets to liquidate the position auction happening in the blockchain, now it's happening in the Oracle network. So now all these MEV bots are bidding for the right to liquidate a position and that value is now being captured by the Oracle network and the Oracle network which in this case is Chainlink can redistribute that value back to the DeFi application. So to date uh Chandlink SVR launched in March 2025 last year together with a biggest DeFi lending protocol and it's recaptured over $10 million in liquidation me to date and that's split

at a ratio between chain link to keep sustainable oracle networks continue to operate as well as returning that value back to the A and the A community and you know the A data to to use it as they want to and this has also expanded over time to being adopted by compound and and various other lending protocols. So the whole point here is that the DeFi lending applications have been leaking a lot of value during the liquidation process and chain like SVR is designed to recapture that value and return it back to the DeFi application. >> Makes complete sense that the DeFi protocols have to maintain solvency at their as their number one priority and and like you said they have to fire sale this collateral when it becomes bad, right? this bad debt, they have to sell

the collateral to maintain solveny in the in the in the market, but you know, they sell it at a discount. They don't need to sell it at as at so steep a discount. And that's where the leaky value comes in. They can sell it for a little bit of a discount. And this SVR Oracle auction helps, you know, the the MEV bots come to a more fair price rather than um, you know, really taking advantage of uh the the lending market itself. and and so give us a sense of you know uh you mentioned 10 million over10 million dollars uh has been saved so far as a result of these integrations uh with chain link SVR. How is how does Atlas fit into this equation and and you know how how are we going to help you

know to scale 10 million to ultimately 100 and and a billion dollars of SVR saved. >> Yeah. Yeah. So Atlas what that is that is what it's called a order flow auction protocol. So it's the actual protocol that's doing and facilitating the auction itself and SVR has operated on Ethereum mainet uh since it launched initially and the integration the merger so to speak between Atlas and SVR is designed to bring SVR to more blockchains due to the whole ecosystem. So with the announcement yesterday SVR went from being live on Ethereum to now being live across five different EVM chains and it can scale to any EVM chain uh that lending protocols are on. So, it's really about just kind of accelerating what SVR is already doing.

And I think this whole concept of of of OEV is interesting because I think it shows a clear pathway to how data feeds and price feeds can be monetized in a way that's not actually extracting value from anyone. I think when people think of me, they think front running. They think sandwich attacks like, oh, who's who you taking the money from? But in this case, the money is coming from ME bots and L1 chains. >> And it's not coming from the users. In fact, it's actually returning value back to the users, back to the applications. So, it's almost like this this win-win dynamic where chain link oracles are able to operate more sustainably because of this source of revenue. And the DeFi applications and the Dows have a new source of sustainable revenue that they can put towards building a better

lending application. And MEV bots still get paid their share. Blockchain still get paid their share, but they're not getting 99% of the liquidation value. are getting a more equitable amount of value for the work that they're doing in those liquidations. Right? So I I I think that OEV while it's a very kind of niche kind of concept, it's it's like the the liquidation plumbing of the DeFi economy. It's taking something that was very extractive and just leaking value to third parties who, you know, were just running liquidation scripts to now returning it back to the infrastructure that's actually securing the loans and facilitating the the loan making process, which I for me just seems like a more fundamentally fair deal for everyone involved. And I think that's when people hear me, they don't

necessarily understand that you're actually creating a more fair distribution of value. >> I I think you make a great point. You know, there there's some people that might say, "Hey, like I run an MEV bbot. I'm a person, too. I want my fair share." But the the result is they still me bots are still getting their fair share. They're just not extracting as much from these users as they were. But the MEV bots are still doing quite all right. Um I I I think this is extremely forward thinking for for a couple of reasons. Um, one is, you know, obviously the the multi-chain world is proliferating and we're seeing uh a lot of DeFi happen on multiple chains. Um, so this acquisition makes a lot of sense to scale uh the the chain link SVR approach. On the on the the same note,

we've got a swath of assets that are going to be tokenized like you mentioned ear New York Stock Exchange, you know, is tokenizing. They're coming 24/7. We're seeing it happen. the RWA space, the tokenization space is taking off. This is a a segment that's poised for a ton of growth. Um earlier we had uh Jim from Superstate. They recently raised 82 and a half in a series B. Um incredible to see and and this again just helps to validate, you know, where we see the space heading with this new asset class uh that is going to be onboarded. We're going to get equities, tokenized equities. we're going to get, you know, tokenized gold and precious metals and and I'm curious to to hear how you react

and how you think about the the scale of def the DeFi landscape as a whole when we start to get you know more tokenized money markets, more tokenized precious metals, more tokenized equities and and they become e uh you know tokenized and composable with all the same DeFi functionality. You know, I there was an example earlier. Someone borrowed $42.5 million of uh USDE uh from the Athena stable coin and used it to to uh purchase uh uh Tether Gold, right? X AU, right? which I can only imagine is going to continue to proliferate these types of use cases on a and a horizon with their RWA protocol,

you know, powered by chain link. Like with RWAs and the scale of tokenized assets entering the DeFi landscape, how does how do you react and how do you think chain link is thinking about like where we're grow where we're going and how we grow from here? Go anywhere onchain instantly with Relay.link. Relay is closing in on 10 billion dollars transferred. Go to relay.link to bridge your assets now. Not your keys, not your coins. From the team that pioneered cold storage, Treasure has just released its new wallet. Guys, if you are still using hot wallets in 2025, 2026, you are missing the entire point. Secure your coins. Get a treasure at treasure.io.

>> Yeah, it's a great question. I think in my mind and maybe this is self-evident to everyone listening but I think tokenized assets is going to be the next mega trend of our industry. You have just unbelievable trillions amount of dollars to come on chain. But I think when you think of why do you want to bring equities and stocks and bonds on chain just bringing the asset on chain and then the asset just sits there is not that useful. It's useful when you can actually do things with those assets. for example, putting them into an a horizon market and being able to borrow stable coins or using it as collateral in a purpose position and doing a delta neutral trade. Like there's it's interesting when you can do things with it. I think what what chain link does the service it provides to asset issuers is utility and it does

that for stable coins. It does that for governance tokens and utility tokens. But it can do that and it is doing that for tokenized assets as well of okay, you've issued the asset. you know, you have the proof reserves and the nav data and all the necessary data. In order to make that useful, you need to be able to list it on a horizon. You need to list it as a per market. You need more data. You need more integration. And chain link is kind of this facilitator connecting the assets to the applications and providing more utility to those assets. So, you know, Chainlink plays, I think, a lot of roles within this new tokenized asset economy. But I think one of the big roles is making these assets more useful by being able to offer, hey, you're tokenizing a bunch of equity or a bunch of debts.

Chainlink's already integrated as the standard across all of DeFi. For example, A Horizon, you can come get plugged into a horizon and chain link will provide the NAV data, proof reserve data, the crosschain interoperability to move it between the different lending markets. Like it'll provide the glue that connects that asset into the lending market. I think that in my personal view, DeFi is exceptionally useful and it's been a great case study for what a tokenized asset economy will look like. I think a lot of these applications in DeFi today have been used for assets of maybe questionable value, so to speak. I I think that there are blue chip assets, but I think there's also a long tale of, you know, things that people just want to speculate on. But we as an industry can very easily hot swap in tokenized assets

as the asset layer and keep the same protocol layer. Maybe you need to add identity verification for permissioned assets. Maybe you need to add some more compliance tooling for the more sensitive uh jurisdictions, but it's the same infrastructure at the end of the day. So the same role that chain link provides of you know securing 70% of the DeFi sector is going to translate one to one to securing hopefully 70% more you know of the tokenized asset economy which is what Janlick is building towards. So it's it's it's the role that Janick plays within this new tokenized asset economy is the same role that it's been playing and has been proven to excel at within the the DeFi economy. So I I think it's I can't be more bullish on the tokeniz asset economy personally and I think that chainlink is very very well

positioned to be the the plumbing of this new economy. >> Yeah, I I like the mental framing a lot of the asset layer. Um you know we we've built out the protocols. We have all these blockchain layers and and and all of this plumbing in in terms of the infrastructure and and I think you're absolutely right. We we failed, you know, to to see that what's what's now missing is the assets, you know, have to be just quality. We have to have quality assets and and for so long we've had, you know, we we do have our blue chips, right? But, you know, that we do have thousands of longtail assets that, you know, don't don't don't belong in, you know, the typical investor's portfolio, right? And so, I I think that is coming to a lot of people's uh forefront of

their mind. We're also seeing in the Wall Street world, they're realizing, you know, all of the infrastructure that is here. And it feels like we're putting some of those final touches on like those KYC's and those privacy elements, those are starting to click into place. And when they do, it becomes fully ready for this asset layer to to migrate onchain and and and we're seeing it happen right right before our eyes and chain link is a centerpiece of that. Um and and so Zach, just you know, I'll hand it over to you to to close us out and and give us some closing thoughts on what's to head uh for Chain Link in in 2026 and beyond.

>> Yeah, I think a lot of it's going to be somewhat similar in terms of continuing to secure the DeFi economy, offer new products like bringing SVR to more blockchain so that more lending applications can recapture value. But I think a lot of it's going to be focused on bringing institutions into production. Getting them to a state where they can start to issue their assets at scale on public chains, on private chains, on whatever kind of environment that they want using chain link as this orchestration layer to kind of facilitate the connectivity between their existing systems and their standardized uh approach of issuing assets. You know, that they have trained thousands of employees and paid millions of dollars for their existing systems. they're going to want to reuse that in this new context of tokenized assets. Chainlink

provides that translation layer as well as providing all of the infrastructure for the applications that exist on public chains both today and the applications that are going to be created in the future as a result of tokenized assets being brought on chain. So I I think that tokenized assets adoption is only going to accelerate. Hopefully, you know, the clarity act and market structure bill gets enacted and that provides the necessary clarity that industry needs. And I I think that that's ultimately only a positive dynamic uh for chain link that this this recent acquisition of Atlas, it's focused on DeFi, but again, you know, DeFi lending is in the tens of billions currently. If we're able to bring on tokenized assets, now DeFi onchain lending can be measured in the trillions

of dollars. And so the proportional value capture of the oracles and of the DeFi applications can scale with that linearly. The more liquidations that's happening, the more me recapture, the more that gets captured in the oracle network and returned back to the application itself. So I think that you know people are very bearish in the current environment everything after 1010 that that that's happened. But I think the protocols that are building the infrastructure that will be used by tokenized assets have never been better positioned. Absolutely. >> We just we just did to you know to my previous point get the high quality assets on board get the institutions engage in these applications and we already have all the infrastructure like we we've been building this for you know since really DeFi summer and so we just bring in the proper assets that people

want to access and all the infrastructure is there. So I'm I'm I'm very optimistic. I I I hope everything plays out you know this year tokenized asset adoption goes vertical. I think it may take a few years to fully ramp up, but I think this will be the year that things actually go into production uh in a meaningful way. So, I'm I'm very optimistic. >> Yeah. And and there are protocols that are well positioned to capitalize on this growth of tokenized assets and and the growth of stable coins, which you know, the the powers that be are are saying, you know, again, trillions um and and that uh that's where we're headed. Zach, Chainlink God, uh thank you so much. always a pleasure having you on the show and uh looking forward to uh to uh really th this this neo financial world that's uh taking place

right before our eyes in 26 and beyond. Um we're going to see you again soon, Zach. Really appreciate you coming on and uh yeah uh stewarding the chain link uh community forward. So we'll see you again next time. Always a pleasure, man. >> Appreciate you having me on. Thanks, Robbie. >> Absolutely. See you next time. Thanks, Chris. Thanks, Zach.