Chainlink partners with Fidelity and Sygnum to provide real-time on-chain NAV data for Fidelity’s $6.9 billion Institutional Liquidity Fund.
Chainlink, Fidelity International, and Sygnum have joined forces to provide Net Asset Value (NAV) information onchain.
As per the announcement made on July 3, the project would enable real-time on-chain access to the NAV of Fidelity’s $6.9 billion Institutional Liquidity Fund.
A fund’s net asset value (NAV) is calculated by subtracting its liabilities from its assets and dividing the result by the total number of outstanding shares. As opposed to conventional approaches, which typically update mutual fund data after each trading day, bringing NAV data on-chain makes it available in real-time.
Sygnum’s clientele will have access to the data. Recently, Sygnum tokenized $50 million from Matter Labs’ coffers. The project was a component of Matter Labs’ plan to transfer its treasury reserves onto blockchain technology while continuing to invest in high-quality, short-term debt instruments, such mutual funds.
Many money market sub-funds are available through Fidelity’s Institutional Liquidity Fund, which is mainly targeted at institutional investors.
“Fund tokenization is likely the largest digital asset trend happening today, and it is a large confirmation that global asset management firms are entering this growing market,” Chainlink’s co-founder Sergey Nazarov said in a statement.
In Nazarov’s view, tokenized funds provide far greater efficiency benefits than traditional methods. Over time, they will “become the way the entire asset management industry operates,” he said.
The Depository Trust and Clearing Corporation (DTCC), utilizing Chainlink’s Cross-Chain Interoperability Protocol (CCIP), revealed its Smart NAV industry test outcomes in May.
The purpose of the pilot project was to investigate the possibility of expanding the Mutual Fund Profile Service I (MFPS I) standard, which is used by the DTCC to send “price and rate” data, or NAV. According to a DTCC report:
“The pilot found that by delivering structured data onchain and creating standard roles and processes, foundational data could be embedded into a multitude of onchain use cases, such as tokenized funds and “bulk consumer” smart contracts, which are contracts that hold data for multiple funds.”
According to DTCC, there is a chance “to potentially expand the scope of the pilot” to provide a wider variety of use cases on more blockchains.