In a landmark collaboration announced on July 3, 2024, Sygnum, a digital asset banking group, Fidelity International, a major asset management firm, and Chainlink, a decentralized oracle network, have joined forces to bring transparency and accessibility to the world of tokenized assets. This partnership represents a significant step forward in bridging the gap between traditional finance and the blockchain industry.
The key focus of this collaboration is Net Asset Value (NAV) data, a crucial metric in the traditional fund industry that reflects the per-share value of a fund’s holdings. By leveraging Chainlink’s secure and automated infrastructure, Sygnum can now provide on-chain access to NAV data for its recently issued tokenized representation of Fidelity International’s $6.9 billion Institutional Liquidity Fund. This essentially means that $50 million of Matter Labs’ company treasury reserves, held within Fidelity’s money market fund, are now represented as tokens on the ZKsync blockchain, with their NAV data readily available on the blockchain itself.
Prior to this development, NAV data for tokenized funds typically resided off-chain, meaning it wasn’t directly accessible on the blockchain. This could lead to delays and potential discrepancies, hindering transparency for investors. By placing NAV data on-chain, Sygnum, Fidelity, and Chainlink are ensuring real-time access to this critical information for all stakeholders involved, including Sygnum’s clients and broader market participants.
The significance of this collaboration extends beyond the immediate use case. Chainlink’s technology offers a “chain-agnostic” approach, allowing NAV data to be securely transferred across any blockchain or even existing off-chain systems. This flexibility is crucial for fostering wider adoption of tokenized assets. Furthermore, Chainlink caters to the evolving needs of tokenized assets by enabling “cross-chain interoperability” and “dynamic synchronization.” This translates to seamless communication between different blockchains and ensures that tokenized assets remain up-to-date across any environment.
Fatmire Bekiri, Head of Tokenization at Sygnum, emphasizes the importance of setting standards in this nascent space. “This is an important milestone,” says Bekiri, “and it’s exciting to see the collaboration between Fidelity International, Chainlink, and Matter Labs come to fruition.” This collaboration paves the way for a more regulated and compliant on-chain ecosystem for tokenized assets.
The broader context of this partnership highlights the growing demand from blockchain-native companies for on-chain access to both assets and NAV data from traditional fund managers like Fidelity. Chainlink’s secure and accurate solution fills this gap, enabling reliable updates across public or private blockchains.
Sergey Nazarov, Co-founder of Chainlink, sees this development as a major step forward for the entire asset management industry. “Fund tokenization is likely the largest digital asset trend happening today,” states Nazarov, “and it is a large confirmation that global asset management firms are entering this growing market.” Nazarov believes that the efficiency and global reach of tokenized funds will ultimately become the standard operating procedure for the entire industry.
This collaboration between Sygnum, Fidelity International, and Chainlink represents a significant milestone in the evolution of tokenized assets. By bringing transparency, accessibility, and security to NAV data, this partnership paves the way for a more efficient and trustworthy future for the entire financial landscape.