- chain link team As a major Us bank to pilot improvement to TradFi infrastructure investment.
- that much program Explore using blockchain technology improve data dissemination.
- This provided: evidence ~ Of concept innovatory Use cases for investment sector.
The Depository Trust and Clearing Corporation (DTCC) provides the TradFi infrastructure critical to clearing and settlement services for U.S. investment companies. The company powers the TradFi investment market by processing trillions of transactions every day. As blockchain technology continues to gain attention, DTCC recognizes its potential to improve core services and operational efficiency.
One of the company’s areas of focus is the Mutual Fund Profile Service I (MFPS I) system, which provides a standardized method for transmitting price and interest rate data, including net asset value (NAV) and dividend distribution data. To improve this process, DTCC recently launched a Smart NAV pilot with Chainlink to explore improved data dissemination capabilities.
Utilizing Chainlink technology
The Smart NAV pilot aimed to improve the data distribution capabilities of MFPS I. Current processes for calculating and distributing NAV data are complex, manual, and inefficient. Given the enormous size of the investment fund industry and global assets under management expected to reach $145 trillion by 2025, the need to bring the MFPS I process into the 21st century is even more urgent.
To address these challenges, the Smart NAV pilot brought together DTCC, Chainlink, and 10 leading financial institutions, including BNY Mellon, JPMorgan, and Invesco. The goal was to evaluate the feasibility of leveraging Chainlink’s blockchain technology to increase efficiency and provide more efficient operations to the existing MFPS I platform.
How Smart NAV Works
The Smart NAV pilot improved the data distribution of the existing MFPS I platform by using modern JSON data structures and wrapping them in blockchain transactions protected by DTCC’s private encryption keys and relaying them via Chainlink’s Cross Chain Interoperability Protocol (CCIP).
CCIP transferred data loads across multiple blockchains, including DTCC’s private Ethereum blockchain. In this network, the smart contract system verified DTCC as an approved and approved publisher before safely storing the on-chain NAV data in a decentralized manner. Once data is available on-chain, clients can consume and utilize that information.
It leverages real-time APIs to push data updates to connected systems, smart contract models such as tokenized fund contracts that directly inherit NAV data, and information using “bulk consumer” contracts that represent multiple baskets of fund data.
This enables simplified and automated distribution of investment data and demonstrates a powerful new way to leverage on-chain data for investment applications.
Pilot’s Discovery
The Smart NAV pilot demonstrated how providing structured investment data on the blockchain and establishing clear roles and processes governed by smart contracts can enable a variety of innovative use cases for investment applications.
Smart NAV opens the door to imaginative new applications and services that leverage investment data flows by bringing pricing and distribution data on-chain in a standard, accessible format.
The pilot demonstrated real-time, fully automated dissemination of NAV and velocity updates, a significant improvement over the slow manual processes of existing systems. It also provided native access to complete historical records, a feature previously impossible.
The success of the Smart NAV pilot also lays the foundation for DTCC and its partners to explore additional use cases, including triggering automated workflow events and allowing asset managers to publish data directly to smart contracts without a centralized hub. .
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