As blockchain technology continues to gain traction among institutional investors, Chainlink (LINK) is positioning itself to capitalize on this momentum, especially in light of pro-crypto regulations that are attracting significant capital inflows.
According to market expert Zach Rynes, the decentralized oracle network is better equipped than XRP to harness the forthcoming wave of institutional blockchain adoption and the tokenization of trillions in assets.
Chainlink Vs XRP
While some argue that Chainlink and the XRP Ledger (XRPL) do not compete directly on a product basis, Rynes suggests that this perspective overlooks the broader implications of their respective roles in the blockchain landscape.
The expert highlights that Chainlink offers a platform that encompasses on-chain data delivery, cross-chain interoperability, automated compliance, privacy-preserving computing, and integration with legacy systems.
These features are considered essential for the tokenization of real-world assets (RWAs) such as funds, equities, commodities, and currencies across diverse blockchain networks, both public and private.
As a result of these advantages, Chainlink is already collaborating with some of the world’s largest financial institutions, including the Central Bank of Brazil, to facilitate the adoption of blockchain technologies and tokenized assets.
Investing in XRP, according to the expert, hinges on the belief that institutions will favor the XRPL as their ledger of choice over others, including proprietary private chains.
In contrast, a bet on Chainlink reflects confidence that institutions will adopt blockchain technology more broadly, regardless of which specific ledger they choose to implement.
Rynes emphasizes that this distinction is crucial, as Chainlink’s services enhance the functionality of any blockchain used by institutions, making it a more complete player in the ecosystem.
Why LINK Is Key For Institutional Blockchain Adoption
Currently, Chainlink secures over $92 billion in total value locked (TVL) across more than 60 blockchain networks through its oracle network, which supports over 450 applications. In comparison, XRPL has a DeFi TVL of around $100 million.
The expert further asserts that the core capabilities that Chainlink provides are more valuable to institutions seeking to navigate the tokenization sector. For instance, data oracles are essential for delivering accurate net asset value (NAV) data for tokenized funds and corporate actions for tokenized equities.
Cross-chain oracles also enable the secure transfer of assets across different blockchains, facilitating delivery-versus-payment (DvP) and payment-versus-payment (PvP) workflows.
Additionally, Chainlink’s legacy-system oracles allow traditional financial institutions to interact with public and private blockchains using existing infrastructure and messaging standards, such as SWIFT.
The expert also notes that a trend of margin compression is emerging for blockchain technology, where the value generated from transaction ordering is increasingly recaptured by applications rather than the networks themselves.
Rynes highlights that this shift underscores the importance of infrastructure providers like Chainlink, which can monetize their services through enterprise deals and integration programs.
While XRP aims to position itself as a bridge currency, Rynes argues that Chainlink’s ability to facilitate cross-chain transactions involving stablecoins and other assets diminishes the need for such intermediary currencies.
As of this writing, LINK is trading at $24, down nearly 5% over the last 24 hours. Over longer periods, however, the cryptocurrency has ranked among the market’s top performers, recording year-to-date gains of 140%.
Featured image from DALL-E, chart from TradingView.com
