The Prophet Chainlink Returning from the Cold: Helping TradFi Understand Blockchain

Instead of replacing traditional finance, Chainlink has established a translation layer that allows the traditional financial system to communicate with the blockchain, evolving from a data provider to an indispensable transaction system. This article is derived from an article by Thejaswini M A, collated, compiled and written by Block unicorn. (Synopsis: Western Union's stablecoin bet: Can the 172-year-old traditional store turn around?) (Background added: From $20 to $800?) Chainlink has not replaced the traditional financial system, they have built a translation layer that allows the traditional financial system to "speak the blockchain language". The 1992 Dream Team averaged 44 points in Olympic basketball, but there's one detail in this story that most people don't remember. They nearly lost their first training match against college players. The problem is not talent. Michael Jordan (Michael Jordan), Magic Johnson (Magic Johnson) and Big Bird Bird (Larry Bird) Being on the same team should theoretically be invincible from day one. The problem is that superstars don't automatically form championship teams. You need a system that transforms individual strengths into collective strengths. You need someone to build bonds that take everyone to the next level. Dream Team coach Chuck Daly (Chuck Daly) did something that seemed very boring in the first week, far less compelling than a highlight dunk: he established a passing route. He determined the timing of the blocking. He created the infrastructure that turned a group of Hall of Famers into an unstoppable force. By the time of the Olympics, a miracle happened. Every pass creates better shots. Each defensive rotation makes the next easier. Each player makes the others more valuable. The genius lies in creating the infrastructure that amplifies the capabilities of all. This is basically what Chainlink does in the cryptocurrency space. While other crypto projects are trying to become the Michael Jordan of blockchain, Chainlink has quietly become the Chuck Daly of digital finance. They built the infrastructure to make it easier for others to shoot. In 2019, Chainlink launched its mainnet with a simple goal: to import sports scores and weather data into Ethereum, allowing people to bet on football matches without relying on centralized bookmakers. Six years later, JPMorgan (JPMorgan) leveraged the same infrastructure for cross-chain Treasury trade settlement, while the Fed (Fed) nodded in approval behind the scenes. Chainlink solves what the cryptocurrency world calls the "oracle puzzle", which is actually that the blockchain is like a digital island, unable to talk to or listen to anything. If you want your smart contract to know Apple's share price, or whether it rained in Kansas yesterday, or whether someone's bank account actually has the dollars they claim, you're going to need something to transmit that information to the blockchain. This thing is the oracle, and Chainlink is the oracle that devours all the other oracles. Chainlink has underpinned more than 60% of the value of decentralized finance (DeFi), approaching 80% on Ethereum. As traditional assets migrate on-chain, they will require the same infrastructure as DeFi. Chainlink is a pioneer in the market and is establishing standards that other platforms follow. Let me explain this infrastructure. Chainlink wasn't originally intended to be a bridge between Wall Street and Web3. But at some point, traditional financial institutions realized a problem: if you want to tokenize Treasuries, you need a way to prove that Treasuries actually exist and are worth as you say. So came Chainlink's proof-of-reserves system (Proof of Reserve), which sounds advanced, but is actually just a very sophisticated way to prove that you're not doing a fractional reserve scam. Suddenly, every major stablecoin issuer needs this service because simply telling people "trust us, we definitely have $100 billion in Treasuries" is no longer enough for regulators, especially after the Terra and FTX crises. This was followed by the introduction of the cross-chain interoperability protocol (CCIP), which allows assets to move between different blockchains. It's like building a universal translator. It helps banks communicate across blockchain barriers. As a result, JPMorgan Chase can now send tokenized deposits from their private Ethereum network to the public Solana network, with Chainlink acting as a trusted messenger. Chainlink has also built tools specifically to help organizations comply with regulations. Their new automated compliance engine, (ACE), automates all the regulatory paperwork that makes crypto transactions legal. Want to move tokenized assets between blockchains while maintaining AML (AML) compliance, know-your-customer (KYC) verification, and audit trails? Chainlink handles all of this automatically, ensuring that every transaction complies with any regulatory requirements in your jurisdiction. This puts them perfectly positioned for the coming wave of tokenized finance. Every bank, asset manager, and government agency that wants to experiment with blockchain technology first needs to address compliance. Chainlink's 2025 story is particularly compelling. Tuttle Capital filed for its first tranche of Chainlink ETFs ( Index Equity Fund ) in January, and the SEC (SEC) is expected to make a decision in the fall of 2025. The timing fits perfectly with the current regulatory environment supporting cryptocurrencies. J.P. Morgan's Kinexys used Chainlink to complete the first cross-chain settlement between the traditional banking system and the public blockchain. The Intercontinental Exchange (Intercontinental Exchange), the parent company of the New York Stock Exchange, integrates the Chainlink data flow (Data Streams) to bring foreign exchange and precious metals data on-chain. When the world's largest stock exchange needed oracle infrastructure, they chose Chainlink. Mastercard (Mastercard) has partnered with Chainlink to enable its 3 billion cardholders to purchase cryptocurrencies directly. When payment processors needed a compliant crypto infrastructure, they chose Chainlink. Chainlink launched data streams for the US stock market and ETFs, for stocks such as Apple, Tesla and the S&P 500...