Sergey Nazarov, one of the co-creators of the blockchain oracle service Chainlink (LINK), predicts that the next major trend in the blockchain industry will be the tokenization of real world assets (RWAs). In a post on the social media platform X, Nazarov, who has a following of 150,000, explains that the RWA trend aims to tokenize assets in traditional markets such as real estate, loans, and bonds, and bring them onto the blockchain.

According to Nazarov, the value of RWAs that can be quickly converted into tokens is in the tens of trillions, with only a small percentage currently being in tokenized form. This includes all commodities, real estate, funds, and more. Notably, large institutions like Blackrock and Fidelity are already participating in the RWA trend through tokenized funds, and Nazarov expects many more to join in the future.

Nazarov believes that on-chain RWAs offer a superior format for secure ownership and transferability of assets. He highlights that they can be purchased and transferred across different countries and financial systems with less friction compared to traditional infrastructure. Furthermore, Nazarov explains that on-chain RWAs provide easier access to global liquidity, which has been a catalyst for the growth of cryptocurrencies over the years.

In terms of efficiency, Nazarov points out that on-chain RWAs have the ability to hold crucial data that proves important information about the underlying asset more quickly and effectively than traditional systems. For example, Chainlink’s usage of on-chain logic to put net asset value (NAV) data on-chain for central securities depositories (CSDs) allows for faster redemption timelines, reducing it from months to minutes. This not only improves efficiency but also has significant economic benefits.

In conclusion, Nazarov believes that the tokenization of real world assets is set to become a leading trend in the blockchain industry. The ability to tokenize assets in traditional markets and bring them onto the blockchain offers numerous advantages in terms of ownership, transferability, and efficiency. As more institutions participate in this trend, the value of on-chain RWAs is expected to increase significantly.