Securitize and Gauntlet Bring Apollo Credit Fund On-Chain in DeFi Push

Tokenization platform Securitize – which boasts more than $3.3 billion in assets under management – is partnering with risk manager Gauntlet to bring private equity firm Apollo’s credit fund on-chain in a bid to bridge real-world assets (RWAs) with decentralized finance (DeFi).

The partnership enables the launch of a “levered yield strategy” built around the Apollo Diversified Credit Securitize Fund (ACRED) running on Compound Blue, a Morpho-powered lending protocol on Polygon’s PoS network.

Via a method called “looping,” the strategy lets permissioned ACRED holders boost returns by repeatedly borrowing against their holdings and reinvesting through a Gauntlet-optimized vault on Morpho. Securitize earlier today called the move “a new chapter” for institutional DeFi in a post on X, formerly Twitter.

“Our collaboration with Securitize, Morpho, and Polygon delivers risk-optimized performance to ACRED holders through a measured process powered by Gauntlet’s unmatched blockchain-based risk management capabilities,” said Rahul Goyal, Gauntlet’s Head of Institutional Partnerships, according to a press release viewed by The Defiant. “ACRED holders can optimize their performance through efficient on-chain rails, demonstrating the powerful capabilities decentralized finance can deliver for institutions.”

The strategy also marks one of the first institutional deployments of sTokens, described as “a new standard developed by Securitize to enable responsible use of RWAs in permissionless DeFi”. If the pilot is successful, Securitize plans to expand the strategy to the Ethereum mainnet and additional chains.

The RWA industry is quickly becoming one of DeFi’s most rapidly growing sectors. Data from RWA.xyz shows the total value of onchain tokenized RWAs has surged to around $19 billion – up 121% over the past year.

The number of asset holders also grew by 5.81% over the past month, reaching 98,820.