Kamino Finance is set to launch a groundbreaking tokenized credit fund on Solana’s DeFi ecosystem, marking a significant step in bringing traditional financial instruments to the fast-growing network.
Solana DeFi Market Expands as Tokenized Credit Fund Set for Launch
Kamino Finance is planning to introduce ACRED, a tokenized version of a private credit fund of asset manager ‘Apollo Global’ to Solana’s decentralized finance (DeFi) ecosystem. The development highlights the growing interest in bringing tokenized real-world assets (RWA) like funds and bonds to crypto-native investors for yield strategies.
Bringing Traditional Financial Instruments to DeFi
A tokenized version of Apollo‘s private credit fund, issued by ‘Securitize‘ , will arrive on Solana’s SOL, bringing traditional financial instruments closer to the fast-growing network. The launch aims to make the ACRED token the first of its kind to be available for on-chain borrowing and leverage on Solana.
Leveraged Yield Strategies and Real-World Asset Tokenization
The product underscores a growing appetite in crypto for real-world asset (RWA) tokenization. RWAs—traditional instruments such as funds, bonds or real estate—are being brought onto blockchain rails to reduce friction in investing, improve access and transparency, and allow for programmable use in DeFi protocols.
Real-world asset tokenization is a process that converts physical assets into digital tokens, allowing for fractional ownership and increased liquidity.
This technology has applications in various industries, including real estate, art, and collectibles.
By creating a digital representation of an asset, tokenization enables investors to buy, sell, and trade fractions of the asset online.
According to a report by ResearchAndMarkets.com, the global tokenized assets market is expected to reach $1.4 trillion by 2025.
Lending protocol Kamino Finance is planning to offer a leveraged yield strategy called ‘looping’ with ACRED, with more RWAs expected to follow. Through Kamino’s Multiply product, users will be able to leverage ACRED for yield strategies—automatically looping the asset to increase exposure while managing collateral and borrow levels through Solana-native smart contracts.
Tipping Point for Solana DeFi Market
Despite Solana’s fast-growing DeFi market, RWAs are yet to take off on the chain. However, with large players in tokenization stepping in, backers of the launch see this as a tipping point. ‘Solana has experienced explosive consumer growth in recent years, but below the surface we are seeing enormous interest from institutions and asset issuers,’ said Marius Ciubotariu, co-founder at Kamino.
Solana is a high-performance, open-source blockchain platform that enables fast and scalable transaction processing.
It uses a proof-of-stake (PoS) consensus algorithm to secure the network and validate transactions.
Solana's architecture allows for up to 65,000 transactions per second, making it one of the fastest 'blockchains in the world.'
The platform is also designed to be energy-efficient, using less power than traditional proof-of-work (PoW) algorithms.
The industry is now in a position to not only bring these assets on-chain, but to provide genuine use-cases. ‘Building on off-chain credit assets in a composable way is the sort of long-term investment we believe can help catalyze further growth of DeFi in Solana,’ said adcv, co-founder of Steakhouse Financial.
Real-World Asset Market Size
Solana hosts $330 million worth of RWAs, small compared to the network’s nearly $9 billion DeFi market size. However, with large players in tokenization stepping in, the industry is poised for significant growth.
The real-world asset market, also known as the NFT market, has experienced significant growth in recent years.
According to a report by NonFungible.com, the total sales volume of NFTs reached $2.5 billion in 2020, with an average sale price of $1,200.
The market is expected to continue growing, driven by increasing demand for unique digital assets and the rise of blockchain technology.
