Asia Morning Briefing: Tokenized Assets Will Eclipse DeFi, Chronicle Founder Niklas Kunkel Says

Good Morning, Asia. Here's what's making news in the markets:

Welcome to Asia Morning Briefing, a daily summary of top stories during U.S. hours and an overview of market moves and analysis. For a detailed overview of U.S. markets, see CoinDesk's Crypto Daybook Americas.

Chronicle, the oracle infrastructure provider powering secure, scalable onchain financial data, has been named the exclusive partner to Grove Protocol, an institutional-grade credit platform with a $1 billion tokenized asset allocation strategy.

Grove, part of the Sky ecosystem known as a 'Star', the name Sky uses for units in its network, launched in June with a $1 billion allocation to tokenized collateralized loan obligations such as the Janus Henderson Anemoy AAA CLO Strategy on Centrifuge, aiming to bridge DeFi and traditional credit markets by giving protocols and asset managers access to diversified, institutional-grade yields.

Niklas Kunkel, Chronicle’s founder, said in an interview with CoinDesk that oracles have evolved beyond their early role as simple price feeds.

“They started as general data distribution mechanisms and got really siloed into just prices for however many years, to the point where if you say Oracle to anyone in crypto, they immediately think of the thing that gives you a price,” he told CoinDesk.

“It wasn’t until recently that that mold is finally being shed and people are starting to understand how important data and context can be and how that can be leveraged in a risk management type of way.”

Kunkel sees tokenized assets as DeFi’s next major growth engine, describing them as a “multi-trillion dollar liquidity injection opportunity” as the sector looks beyond BTC and ETH.

“RWAs are not crypto native, so the risk management around them needs to be much more scrutinized," he continued. "Everything is not on chain, and so where oracles really fill that gap is to add that context back in, to bring that transparency back.”

In Kunkel’s view, the regulatory potential of oracles is just beginning to be recognized.

“In the real world, this is usually done through regulation where you need to make quarterly filings,” he said. “But in DeFi we expect finality in the span of blocks, and once regulators actually start understanding what oracles can do, they’re going to essentially become Oracle’s biggest adopters, because oracles essentially become like reg tech.”

This partnership marks a step in Chronicle’s plan to dominate the tokenized asset oracle market, a position Kunkel believes will soon outgrow DeFi itself.

Market Movers

BTC: BTC is trading at $119K, up 2% in the last 24 hours. A recent JP Morgan note argued that a bullish S&P 500 outlook could lift BTC by boosting risk appetite and capital flows into speculative assets, given their historical positive correlation.

ETH: ETH is trading above $4200. Bizantine Capital managing partner March Zheng said in a note to CoinDesk that the forced closure of so many ETH shorts during the past 72 hours as helped further accelerate the digital asset's rally.

Gold: Gold is holding near record highs as weaker U.S. economic data, trade tensions, and a dovish Fed outlook boost demand, with upcoming inflation and retail sales data likely to shape its next move.

Nikkei 225: Closed for a public holiday.

Elsewhere in Crypto

• El Salvador’s new bitcoin law signals shift from retail adoption to institutional investment (The Block)
• Stablecoin issuers like Circle and Tether are gobbling up more Treasuries than most countries. Here’s how that could reshape the U.S. economy (Fortune)
• Animoca Brands and Standard Chartered Establish Stablecoin Issuer in Hong Kong (CoinDesk)