Apollo Global’s Large Private Equity Credit Fund to be Tokenized on Solana (SOL)

A digital version of a significant private credit fund overseen by Apollo is set to enter Solana’s decentralized finance (DeFi) landscape, enhancing the integration of conventional financial tools within this expanding network.

This initiative, led by Kamino Finance alongside Securitize and Steakhouse Financial, intends for the Apollo Diversified Credit Securitize Fund (ACRED) token to be the inaugural asset available for on-chain lending and leverage on Solana, pending the completion of an audit as mentioned by Kamino.

Introduced in January, the ACRED token provides access to Apollo’s private credit strategies and is created using Securitize’s compliant token framework. It’s set to be the first token on Solana adopting Securitize’s sToken standard, with future assets anticipated to join the ecosystem.

This development highlights a rising interest in the cryptocurrency sector for tokenizing real-world assets (RWAs). RWAs, such as funds, bonds, and real estate, are being transitioned onto blockchain technology to enhance investment efficiency, accessibility, transparency, and to facilitate programmable functionalities within DeFi frameworks. Consequently, investors can utilize RWAs as collateral for borrowing, engage in yield farming, or incorporate them into automated investment strategies.

“The true value of tokenization emerges when these assets find their place in DeFi, driving the creation of innovative products and strategies,” explains Reid Simon, who leads DeFi and credit solutions at Securitize.

While Solana’s DeFi sector is rapidly expanding, the adoption of RWAs on this chain has thus far been limited. Data indicates that Solana currently harbors $330 million in RWAs, which is modest compared to its approximately $9 billion DeFi market. In contrast, Ethereum’s RWA market is valued at around $7 billion. However, proponents of this launch believe that the entry of significant players into tokenization could catalyze a shift.

“Solana has seen remarkable user growth recently, but there’s significant institutional and issuer interest beneath the surface,” stated Marius Ciubotariu, a Kamino co-founder. “We are finally capable of not just bringing these assets on-chain, but also showcasing authentic use cases.”

Through the Multiply product from Kamino, users can utilize ACRED for yield strategies, seamlessly compounding their exposure while regulating collateral and borrowing levels using smart contracts native to Solana. This offering shares similarities with what Gauntlet rolled out on Polygon in late April.

“Constructing off-chain credit assets in a modular fashion is a long-term investment strategy we believe will stimulate further growth in Solana’s DeFi sector,” remarked adcv, co-founder of Steakhouse Financial.