Grove, a new decentralized finance (DeFi) protocol focused on institutional-grade credit infrastructure, emerged from stealth on Wednesday with a $1 billion commitment to a tokenized asset strategy.
The protocol aims to bridge DeFi with traditional financial assets by routing on-chain capital into regulated credit investments, focusing on collateralized loan obligations (CLOs). Through its infrastructure, Grove gives crypto-native protocols and asset managers access to real-world asset (RWA) investments, helping them put idle reserves to work and a yield that’s independent from crypto markets.
The launch also marks Grove’s debut as the latest “Star” within the Sky Ecosystem, one of the largest and longest running DeFi lender formerly known as MakerDAO. Sky is undergoing an overhaul called Endgame that breaks the protocol into autonomous units called “stars,” each responsible for its own governance and innovation at the edge of the ecosystem. The first such entity was Spark, a yield-earning and borrowing protocol. Sky also issues the $3.7 billion DAI and $3.4 billion USDS stablecoins, and has been increasingly shifting reserves to real-world assets such as tokenized Treasuries.
Grove starts out with a $1 billion allocation from Sky that will put into the Janus Henderson Anemoy AAA CLO Strategy (JAAA), a tokenized fund of managed by Janus Henderson and built on Centrifuge, a blockchain platform that specializes in real-world asset tokenization.
The core contributor team behind Grove — Mark Phillips, Kevin Chan and Sam Paderewski — had previous experiences at Deloitte, Hildene Capital Management, BlockTower Capital and Citibank before transitioning to DeFi. The protocol was incubated by DeFi specialist Steakhouse Financial, a firm that played a key role in bringing real-world assets into the Sky system.
“While tokenized treasuries have paved the way, there’s a growing demand for more diversified, high-quality assets on-chain,” said Anil Sood, chief strategy and growth officer of Centrifuge.
“With the launch of Grove, for the first time, protocols can access liquid, institutional-grade CLOs while maintaining the flexibility to pivot between DeFi and TradFi yield environments,” said Sam Padarewski.