Key Highlights
- Crypto Cycle Stability: This cycle shows no major failures, signaling a more reliable market for investors.
- Real-World Assets Growth: Assets like tokenized commodities are moving on-chain independently of crypto prices.
- Chainlink’s Role: Chainlink provides data, connectivity, and orchestration to make RWAs scalable and secure.
Chainlink Co-Founder Sergey Nazarov has shared a rare, in-depth look at what the current crypto cycle reveals about the industry’s progress and its next stage of growth.
In a detailed post on X, he argued that real-world assets (RWAs) moving on-chain could soon surpass cryptocurrencies in total value and reshape how the industry operates.
Crypto cycles are changing
Nazarov began by saying that cycles are normal in crypto, but what matters is what each cycle teaches. He highlighted that this cycle is different from previous ones. Unlike the last cycle, which saw FTX collapse and multiple lenders wiped out during price drops, this time there have been no large-scale risk management failures.
He noted that the ecosystem is now better at handling drawdowns and liquidity problems. For both retail and institutional investors, this makes crypto a safer, more reliable place for capital.
Real-world assets are gaining ground
One of the most important trends Nazarov highlighted is the growing movement of real-world assets onto blockchains. He pointed out that this growth happens independently of cryptocurrency prices. Tokenized assets and on-chain perpetual markets continue to expand, providing unique value regardless of whether Bitcoin (BTC) or Ethereum (ETH) prices rise or fall.
He gave examples of on-chain perpetual markets for commodities like silver, which have rivaled traditional exchanges, especially when trading in centralized, permissioned markets became riskier or less accessible.
According to him, this shows that on-chain markets are becoming valuable on their own, providing 24/7 trading, automated collateral management, and reliable data flows.
Three trends driving the industry
Nazarov identified three forces that he expects will define the next stage of blockchain adoption:
- On-chain perps and tokenized assets – These markets are proving their long-term value and show that asset tokenization and continuous, automated markets are here to stay.
- Institutional adoption fueled by technology – Access to always-on, permissionless markets will drive institutional interest. The adoption is driven not by crypto prices, but by the fundamental advantages of blockchain.
- Infrastructure demand for RWAs – As real-world assets on-chain become more complex, systems are needed to connect blockchain networks with traditional finance, manage data, and coordinate workflows. Chainlink is already providing these capabilities, helping institutions scale and integrate RWAs.
How Chainlink supports real-world assets
Nazarov explained how Chainlink is positioned to support this new wave of on-chain RWAs.
- Data: Chainlink provides market pricing, proof of reserves (PoR), and net asset values for tokenized funds. It already serves the majority of DeFi platforms and has partnered with institutional data providers such as S&P and ICE, helping to bring real-world data onto blockchain.
In fact, Chainlink feeds more than 70% of the data needs for DeFi applications, making it the largest provider of data to the leading blockchains.
- Connectivity: Chainlink enables seamless interaction between blockchains and traditional finance (TradFi), integrating liquidity from multiple sources and supporting TradFi payments on-chain. Its systems have been chosen for their security and reliability by leading Web3 security teams.
- Orchestration: Through the Chainlink Runtime Environment (CRE), multiple chains, off-chain systems, data sources, and AI can be coordinated into a single workflow. CRE also introduces privacy features, allowing sensitive enterprise processes to run safely on-chain.
A future where RWAs surpass crypto
Looking ahead, Nazarov believes on-chain RWAs will eventually surpass cryptocurrencies in total value: “On-chain RWAs will surpass cryptocurrency in the total value in our industry, and what our industry is about will fundamentally change.”
He says that while this will boost cryptocurrency growth as an asset class, the mainstream adoption of blockchain will be driven by real-world assets. “I have never been more excited about our industry’s potential to become the way a better version of the global financial system works to benefit all of us.”
The combination of growing on-chain markets, institutional adoption, and infrastructure like Chainlink’s data, connectivity, and orchestration is setting the stage for a new era. Blockchain could move from being primarily about speculative assets to becoming a backbone for real-world financial activity, with RWAs at its center.
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