The Depository Trust and Clearing Corporation (DTCC), the largest securities settlement system globally, has completed a pilot project called Smart NAV in partnership with blockchain oracle Chainlink (LINK), with major US financial institutions also taking part.
The pilot aimed to establish a standardized process for bringing and disseminating net asset value (NAV) data of funds across multiple blockchains, making tokenization of funds more efficient over time.
Entities like JPMorgan, Franklin Templeton, BNY Mellon, and State Street explored a digital extension to DTCC’s Mutual Fund Profile Service (MFPS I) to utilize distributed ledger technology (DLT) for data dissemination and consumption.
The pilot found that by delivering structured data onchain and creating standard roles and processes, foundational data could be embedded into various on-chain use cases like tokenized funds and “bulk consumer” smart contracts holding data for multiple funds.
The pilot successfully demonstrated the feasibility of integrating structured NAV data onto blockchains, ensuring consistency and accuracy. It also established automated data routing via smart contracts, promoting dynamic data management and preventing fragmentation through Chainlink’s Cross-Chain Interoperability Protocol (CCIP).
Clients were able to consume price and rate data in real-time through new interfaces, including APIs and smart contracts, enabling instant updates and facilitating various use cases, such as automated portfolio rebalancing.
Once fully deployed, Smart NAV will expand the scope of data dissemination to include key reference data and other blockchain-triggered workflows. This infrastructure will provide a foundation for more streamlined and efficient operational processes across the financial industry, as tokenization of real-world assets (RWA) like bonds, funds, and traditional investments has become one of the most sought-after use cases for blockchain technology.