Flash Talk by Niklas Kunkel - Founder, Chronicle

Thank you everyone. Um I'm Nicholas Conungle, the founder of Chronicle. And uh let's start with kind of what is Chronicle, right? We are uh the second largest Oracle provider. Uh we secure around 15 billion of uh of assets um and have been around since uh basically the beginning of Ethereum.

We were the first oracle on Ethereum mainet uh having been live since May of 2017. And you may recognize us by our previous name which was uh Maker Dow. Um but what I want to talk about today is tokenized assets. So I know everyone has been, you know, kind of depressed uh looking at the markets, right? They've not been the most pretty, right?

BTC is down, ETH is down, Salana is down, right? Um but there is a big kind of bifurcation of what is happening on the institutional side versus price action. Um, and you know, uh, if you just look at like, for example, the predictions of how big this market is going to grow, um, I have a few quotes up here, right? You'll see a range of anywhere from like two trillion, you know, all the way to something like 16 trillion, right? Um, so this market is going to be huge.

um it's going to eclipse the size of uh DeFi uh probably within the next six months. Um so and really like the size of DeFi is like constrained by what is the price of BTC, what is the price of ETH, what is the price of Soul because that is the only kind of uh collateral that we have. And so what we really need to grow DeFi, right, is this injection of highquality collateral, right? It's this injection of tokenized kind of real financial assets. And so this kind of presents the first problem is tokenized assets are not cryptonative.

How do you stuff this what is essentially just an IOU wrapper token into DeFi protocol? Um you have another problem which is because these assets are not cryptonative. They have no transparency whatsoever, right? Um you have no metadata related to does this asset actually exist to do you actually own this asset to what are you know what is the value of of this asset? Is it yieldbearing?

Right? What are what are the other what is the contextual like context of of this asset? And even if you were to get this data, what guarantees do you have that that data is correct, right? Uh having a stable coin issuer tell you these are our proof of reserves um is not a winning formula uh as we saw with uh the the streamer uh DPEG a couple weeks ago. So um earlier this year we launched uh what we call proof of asset which is an oracle dedicated to tokenized assets that is supposed to tackle and fix like all of these problems.

So in essence what we're trying to do is bridge tradi to defy right and so what we're saying is we'll get the data directly from like the source right so in the case of a tokenized asset you're not going to the tokenized asset issuer you're not going to the fund administrator you're going as deep as you can you know all preferably all the way to the custodian right so you have uh readle access at the custodian and like you could actually see the asset like is there and you can see all of the the properties right that surround that asset. Um now you can generate proofs to prove that you sourced the data from here right you didn't tamper with the data that any calculations that you do you've provably done right and so now that data can be consumed in a DeFi context but more importantly it can verifiably right it can provably be used in a D5 context and this is what is necessary to power the risk management systems of of a D5 protocol when it's integrating a tokenized asset. So, um I want to kind of walk you through an example of uh Chronicle proof of asset at work at scale. Um so, uh this is a view of our Oracle dashboard uh for um a customer of ours called M0. If you're not familiar with M0, they're a stable coin orchestration platform.

So anyone can go and create their own uh stable coin, you know, backed by by real assets. Uh usually T- bills, re repos, right, money market funds. Um so uh for example, right, the the new MetaMask stable coin, right, is actually issued through M0, right? And so every single stable coin that is minted through M0 has a uh is using a chronicle proof of asset as an attestation agent. So uh someone will go to the protocol and say hey I want to mint I don't know uh 2 million stable coins chronicle proof of asset will go look in the securities account at the custodian okay how much you know in reserves do you have can you actually are you actually allowed to mint this much uh if you if you are right we give you a signature right to a test to these reserves and you can use that signature to mint right and the same process happens in reverse for burning right we have direct access to the custodian account.

So, we can tell you, you know, don't it's not a trust me bro, this stable coin is worth a dollar. It's you can see what all of the underlying holdings are, right? Uh what the distribution is, what the yield on those products is, any like liquidity constraints in terms of like maturities. Um here you can see like all of the mints that have been done, right? All of the reserve updates.

Um, and so I I I hope you see like how, you know, th this is actually like really useful. Um, and it's actually incredible the amount of partners that we've been able to put together over the last 10 months. Um, we're really happy to work with some of the largest asset managers in the world. Um, effectively almost every single um, tokenized asset issuer. um and some of the largest kind of uh risk curators and and capital allocators in in the space.

And so just to put some hard numbers to this um the top number right uh is uh around 10 billion right that's what we have secured in just DeFi over our I don't know I mean we built this a maker in like 2017 so like that's eight years in eight years of existence we you know were able to put together a business that secures 10 billion in just 10 months of operation proof of asset already secures is 5 a.5 billion, right? So, um I mean I would like to say this is a testament to like you know how amazing my my team is and and they are incredible. Uh but it's really a testament to how much this space is growing and how much room there still is for this tokenized asset vertical to to grow. And so I I just want to wrap this up here.

Um, you know, I I think at Chronicle, we're we're really um helping bridge TRDFI to DeFi. And, you know, the goal here, right, is that, you know, in 5 years from now, we we don't call it DeFi. We don't call it Tradfi. It'll just be FI. So, um I think that's it for me today.

Um if you uh want to follow us, uh you can connect to us on Twitter, check out our website. uh that dashboard that I had in my slides. You can go check it out yourself at chroniclelabs.orgdashboard. And uh don't verify or sorry, trust don't verify.

[laughter] Cheers.