Chronicle–Grove Protocol Alliance: Building a Massive Tokenized Credit Platform
Grove Protocol has announced Chronicle as its exclusive partner. Chronicle is the oracle infrastructure provider that powers scalable and secure on-chain financial data. Oracles have progressed from their initial function as basic price feeds, according to Chronicle’s founder Niklas Kunkel, who spoke with CoinDesk.
They started as general data distribution mechanisms and got really siloed into just prices for however many years, to the point where if you say Oracle to anyone in crypto, they immediately think of the thing that gives you a price. It wasn’t until recently that that mold is finally being shed and people are starting to understand how important data and context can be and how that can be leveraged in a risk management type of way.
Kunkel
Sky Ecosystem’s Grove Aims to Bridge DeFi and Traditional Credit Markets
As a component of the Sky ecosystem, Grove is referred to as “Star,” which is the name Sky assigns to its network units. Tokenized secured credit obligations, like the Janus Henderson Anemoy AAA CLO Strategy on Centrifuge, received a $1 billion allocation when Grove began operations in June. Grove wants to bridge the gap between DeFi and conventional credit markets by giving asset managers and protocols access to a variety of institutional-grade yields.
Why Do Tokenized Assets Require Smarter Oracle Solutions?
As the industry looks beyond Bitcoin and Ethereum, Kunkel views tokenized assets as DeFi’s next significant development engine, characterizing them as a multi-trillion dollar liquidity injection opportunity.
RWAs are not crypto native, so the risk management around them needs to be much more scrutinized,” he continued. “Everything is not on chain, and so where oracles really fill that gap is to add that context back in, to bring that transparency back.
Kunkel
This collaboration is part of Chronicle’s strategy to take control of the tokenized asset oracle market, a position Kunkel thinks DeFi will soon surpass. According to Kunkel, the regulatory potential of oracles is only now becoming apparent.
In the real world, this is usually done through regulation where you need to make quarterly filings. But in DeFi we expect finality in the span of blocks, and once regulators actually start understanding what oracles can do, they’re going to essentially become Oracle’s biggest adopters, because oracles essentially become like reg tech.
Kunkel
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