With the evolving ecosystem comes many new developments in decentralized finance which support the latest announcement of Chainlink to integrate Ethereum crypto assets and real-world assets.
Chainlink announced its association with the DeFi Money Market (DMM) to provide money markets of higher yield on Eth mainnet financed by tokenized real-world assets.
In the article published by DMM Foundation, apart from mentioning Chainlink collaboration, the firm noted that there would be exponential growth for crypto assets in the upcoming few years given that fiat currencies are rapidly transformed into digital assets.
A Massive Opportunity To Capitalize On Declining Yields
The article asserts that the crypto market has to come a long way since its $250 billion market capitalization is minuscule as compared to the estimated $90 trillion physical money in the world.
If the banks keep dropping the interest rates and printing the physical money, it would soon come in negative interest territory given the vast majority of this money is virtually earning no interest.
According to DMM, by creating decentralized money markets of higher yield via blockchain technology, they can capitalize on declining yields in traditional money markets.
Defipulse, the analytics and rankings hub for DeFi tweeted that Banks better had a watch out as the integration of real-world assets into DeFi is finally going to happen.
1/ Banks better watch out because the dream of integrating real world assets into #DeFi is becoming a reality.
— DeFi Pulse 🍇 (@defipulse) March 2, 2020
DeFi markets will enable borrowers to use real-world assets which would be visible on-chain as collateral for getting crypto-asset loans, noted DMM. The article further stated that the firm is working towards filling this gap by creating the first blockchain-based money market.
This will allow borrowers to get crypto loans for short-term capital using their real-world assets as collateral and provide low-risk investors to earn passive interest income by lending cryptocurrency.
This partnership between Chainlink and DMM is a step forward in the evolution of the DeFi market, which is evolving rapidly.