TokenFunder, the first registered digital securities platform in Canada, is excited to announce that it will be using Chainlink as it’s go-to oracle solution. Our first planned integration involves TokenFunder supporting and consuming a Chainlink-powered CAD/USD decentralized price oracle to access fair market, tamperproof exchange rates. This will enable users to purchase Canadian income-generating assets on TokenFunder using USD stablecoins, as well the wider ecosystem of DeFi dApps to price assets and collateral in CAD for the first time.
TokenFunder’s Digital Securities Model
TokenFunder, operated by and registered with Canadian Securities regulators as “TokenGX”, is an Exempt Market Dealer (EMD) in Canada. An EMD in Canada works similar to a broker-dealer in the US.
We started our journey in 2017 facilitating Canada’s first regulated token offering. We then obtained approval for issuing general security tokens in 2019, and have achieved multiple regulatory milestones towards creating Canada’s first private market trading platform. TokenFunder is the first dealer platform in Canada licensed to issue and trade regulated securities on a public blockchain. For more information, refer to the links below:
- TokenGX dealer registration terms & conditions
- Special approval for TokenGX to experiment with digital exchange of private securities
We believe that the next logical step for the future direction of DeFi is integration with real-world market assets. As much as we’d like to see everything decentralized, when it comes to asset origination in the real world, we co-exist with securities regulation, lawyers, and accountants in the foreseeable future. We can, however, introduce regulated assets onto DeFi, and there are several ways it can greatly benefit the DeFi ecosystem:
- In terms of dollar amount, the traditional market makes the current DeFi volume look like a rounding error. Onboarding these assets offers strong potential to grow the DeFi market.
- As the saying goes, diversification is the only free lunch in investing. Traditional markets offer uncorrelated asset types. This would allow DeFi yield investors to maintain a good return at a lower risk.
- With a larger selection of diversified assets, DeFi protocols can gradually attract more investor groups, including ones that are not crypto-native.
Combining the intricate securities regulations and the openness of decentralized finance is difficult. While we have already initiated broad-scope DeFi discussions with top securities regulators, it is always better to launch with a narrower scope first.
Our immediate next step is to seek approval for the proposed regulatory path of onboarding fix-priced yielding assets onto DeFi smart contracts. These assets will be priced in Canadian dollars and generate a targeted 8-11% APR.
Chainlink Provides Secure, Transparent Price Oracles
Real-world market assets are typically priced by the issuer in fixed terms, or by traditional exchanges if they are liquid.
During early stages of DeFi integration, we do not expect there to be sufficient on-chain liquidity for these assets to achieve proper price discovery, hence the asset prices will need to be called from the existing markets into our Ethereum smart contracts. Calling an API in this manner requires a ‘blockchain oracle’ to ensure accurate, secure, and reliable data is delivered to the smart contracts. Thus, the oracle will allow these real-world market assets that are priced in CAD, to then be listed and understood by DeFi protocols in terms of USD, particularly because USD stablecoins are the most widely used as a base currency.
We selected Chainlink because it’s the most widely adopted and battle-tested blockchain oracle solution in the markets. It has become the industry standard oracle solution because it provides high-quality data sourced from premium data sources, operates using security review oracle nodes run by leading blockchain DevOps and security teams, and incorporates decentralization at the data source and oracle level to ensure data is delivered to projects in a highly available, tamperproof, and accurate manner. Hence, why Chainlink is already relied on by many of the leading DeFi and CeFi projects, such as Aave, Synthetix, Celsius, collectively securing over 10 billion dollars in on-chain value.
“We are excited to provide DeFi markets with newfound abilities to purchase real-world income-generating assets. A key component to bringing this to fruition is having secure and accurately sourced exchange rates available directly on-chain, ensuring users can buy these assets listed in CAD. This will lead to a more seamless integration and adoption within the current DeFi landscape, as well as allow other DeFi projects to use and support the CAD/USD Chainlink Price Oracle to further incorporate CAD-denominated assets.” said Alan Wunsche, CEO of TokenFunder.
TokenFunder is thrilled to start working with Chainlink to further democratize access and increase the utility of real-world securities. We look forward to expanding into more oracle integrations in the future to further enhance regulated assets on-chain.
Chainlink is the most widely used and secure way to power universally connected smart contracts. With Chainlink, developers can connect any blockchain with high-quality data sources from other blockchains as well as real-world data. Managed by a global, decentralized community of hundreds of thousands of people, Chainlink is introducing a fairer model for contracts. Its network currently secures billions of dollars in value for smart contracts across the decentralized finance (DeFi), insurance and gaming ecosystems, among others.
Chainlink is trusted by hundreds of organizations to deliver definitive truth via secure, reliable data feeds. To learn more, visit chain.link, subscribe to the Chainlink newsletter, and follow @chainlink on Twitter.
TokenFunder is a blockchain-based pioneer in the democratization of investing and digital issuance of regulated digital securities in the private markets, providing a regulatory-compliant investing service for private market companies raising capital and a platform for investors to manage and trade their digital securities.
TokenFunder’s unique digital onboarding and investing process bridges regulatory-compliant KYC with on-chain digital securities, powered by smart contracts to provide a new level of security and transparency for private markets.