DTCC’s pilot project with Chainlink drives blockchain data to expand fund tokenization

The
Depository
Trust
and
Clearing
Corporation
(DTCC),
the
world’s
largest
securities
settlement
system,
has
completed
a
pilot
project
called
Smart
NAV
in
collaboration
with
blockchain
oracle
Chainlink
(LINK).
Major
financial
institutions
from
the
US
also
participated
in
the
pilot.

According
to
a

report
published
by
DTCC,
the
pilot
was
initiated
to
establish
a
standardized
process
for
bringing
and
disseminating
net
asset
value
(NAV)
data
of
funds
across
multiple
blockchains.
With
the
standardization,
the
tokenization
of
funds
becomes
easier
and
more
efficient
over
time.

The
Smart
NAV
pilot,
which
included
participants
such
as
JPMorgan,
Franklin
Templeton,
BNY
Mellon,
and
State
Street,
explored
a
digital
extension
to
DTCC’s
Mutual
Fund
Profile
Service
(MFPS
I)
to
leverage
distributed
ledger
technology
(DLT)
for
data
dissemination
and
consumption.

By
delivering
structured
data
onchain
and
creating
standard
roles
and
processes,
the
pilot
found
that
foundational
data
could
be
embedded
into
various
on-chain
use
cases,
such
as
tokenized
funds
and
“bulk
consumer”
smart
contracts,
which
hold
data
for
multiple
funds.

The
pilot
successfully
demonstrated
the
feasibility
of
integrating
structured
NAV
data
onto
blockchains,
ensuring
consistency
and
accuracy.
It
also
established
automated
data
routing
via
smart
contracts,
promoting
dynamic
data
management
and
preventing
fragmentation
through
Chainlink’s
Cross-Chain
Interoperability
Protocol
(CCIP).

Notably,
the
project
had
a
limited
impact
on
existing
market
practices
by
allowing
clients
to
use
current
channels
and
providing
automated
access
to
historical
data
without
manual
record-keeping.

Clients
involved
in
the
project
gained
the
ability
to
consume
price
and
rate
data
in
real-time
through
new
interfaces,
including
APIs
and
smart
contracts.
The
new
data
consumption
methods
include
real-time
API
services
and
smart
contracts
designed
for
single
funds
or
bulk
fund
groups,
enabling
instant
updates
and
facilitating
various
use
cases,
such
as
automated
portfolio
rebalancing.

Once
fully
deployed,
the
Smart
NAV
would
open
opportunities
for
expanding
the
scope
of
data
dissemination
to
include
key
reference
data
and
other
blockchain-triggered
workflows.
Such
an
infrastructure
would
provide
the
foundation
for
more
streamlined
and
efficient
operational
processes
across
the
financial
industry,
as
tokenization
of
real-world
assets
(RWA)
such
as
bonds,
funds,
and
other
traditional
investments
has
become
one
of
the
most
sought-after
use
cases
for
blockchain
technology.