- Chainlink and eight market infrastructures and financial institutions have disclosed to have found a successful solution to a decade-long challenge.
- In the next phase of this initiative, there will be an integration of ISO standards and Swift messaging and connectivity to improve interoperability.
Chainlink (LINK) has launched an industry initiative through the combination of advancements in Artificial Intelligence (AI), Oracles, and blockchain to solve the long-standing problem in corporate action. Joining hands with market infrastructures and financial institutions, including SWIFT, Euroclear, Franklin Templeton, UBS, Wellington Management, Vontobel, Sygnum Bank, and CACEIS, Chainlink is bringing a long-lasting solution to the issue of lack of real-time standardized data in fragmented markets in Europe.
We’re excited to announce the results of an industry-wide corporate actions initiative between Chainlink, Euroclear, Swift, & 6 financial institutions. We successfully demonstrated how AI, oracles & blockchains can solve a decades-long unstructured data challenge in finance pic.twitter.com/4YOT5tX2sr— Chainlink (@chainlink) October 21, 2024
Prior to the commencement of this groundbreaking initiative, the team relied on research conducted by ValueExchange and ISSA, which hints that regional investors and brokers in custodian business incur a cost of about $3 million to $5 million each annually on today’s inefficient corporate action processes. According to the report, 70% of business units globally have been paying more than $2 million each due to corporate action errors. Fascinatingly, data was indicated to be the cause of 56% of these errors.
Challenges and Approach
In a report shared by Chainlink, the ValueExchange research summarized four main challenges that confront the corporate action data:
- Lack of standard method by which issuers announce corporation action events.
- There is no single source of truth that maintains the state of corporate actions in a place that is universally accepted.
- Processing details and terminology are mostly highly specific to a particular market or financial instrument and not standardized industry-wide.
- Responsibilities for failures in information flow cannot be passed on to the direct source of information.
Through this collaboration, a unified golden record of corporate action data that has been synchronized across multiple blockchains was crafted using AI models, oracles, and blockchains.
According to the report, its use of a consensus-based approach enabled unstructured off-chain data to be sourced and converted into structured, machine-readable data. From this point, the Chainlink CCIP was leveraged to increase the accessibility of this data by ensuring that the output is published on various private and public blockchain networks. At the same time, data was synchronized across networks to maintain unified golden records.
According to the information shared by Chainlink, the LLM model used by the Oracle network Included “LLMs by OpenAI (ChatGPT 4o), Google (Gemini 1.5), and Anthropic (Claude 3.5).”
Results of the Initiative Led by Chainlink
Following this exercise, the initiative was reported to have achieved a massive architecture milestone in the effort to improve the management and dissemination of corporate action data. Firstly, a novel data extraction and structuring process was achieved. Secondly, the LLM consensus framework for financial data was a success. Finally, there was a near real-time data distribution.
In the next phase, the team would integrate established ISO standards, as well as Swift messaging and connectivity, to ensure that there is interoperability between on-chain unified golden records and the “existing mission-critical portfolio processing and management systems used by financial institutions.”
Our vision is to expand the scope of the unified golden record model by converting additional sources of unstructured data into structured data for financial assets, expanding the benefits of AI and Chainlink oracles to the wider financial industry.
At press time, LINK was trading at $12 after surging by 1% in the last 24 hours.
