Apollo and Securitize Disrupt Finance with Blockchain-Powered Tokenized Credit Fund (ACRED)

Wall Street meets Web3 as two giants drop a digital asset bombshell.

Apollo Global Management—yes, the $500B alternative investment titan—just teamed with Securitize to launch ACRED, a tokenized credit fund on-chain. No paperwork, no middlemen, just programmable yield.

Why it matters: The 'unsexy' $1.3T private credit market finally gets a DeFi makeover. Institutions can now trade loan exposure like memecoins (with marginally more fundamentals).

The kicker? This isn't some experimental pilot. Apollo's putting real assets on-chain—because even boomer finance giants know analog portfolios are so 2024.

Cynic's corner: 'Innovation' here means Wall Street found a way to charge 2-and-20 on blockchain rails. Progress!

How investors use sACRED to leverage returns?

After purchasing ACRED, holders may “mint’’ a second token called sACRED, which they can use as collateral. Using it, an investor can borrow stablecoins, crypto tokens designed to track the U.S. dollar, on decentralized‑finance, or DeFi, platforms.

The borrowed cash can then be cycled into more ACRED, creating a loop that magnifies exposure to Apollo’s loan book.

The fund requires a minimum commitment of $50,000 and carries a 2% management charge. Early participants include Coinbase Asset Management.

Apollo’s entry follows similar blockchain experiments by large asset managers such as BlackRock and Franklin Templeton, signaling Wall Street’s wider shift from being a skeptic of crypto to using its plumbing to reach new pools of cash.

Securitize says ACRED follows the value of the loans it backs, so investors earn the loan interest. Extra gains are possible when sACRED is used as collateral on DeFi platforms, though that adds more risk.

Big crypto payouts are rare now, so some traders blend standard credit with blockchain leverage.

Cindy Leow, co‑founder of the Solana‑based project Drift, said the era of “wild west DeFi” offers such as “100 percent APY on token farming is completely dead.” Drift plans to make sACRED available to its qualified users. “Traders realize they need to hedge against crypto‑only yields, so private credit offers a great solution,” Leow added.

Composability, using one token across many programs, is a key attraction of DeFi.

“Composability within DeFi allows you to do many strategies with the fund that you can’t do in traditional finance,” said Tarun Chitra, chief executive of risk‑analytics firm Gauntlet. Such flexibility, he noted, can attract buyers even when interest‑rate conditions are not ideal for private credit.

DeFi exposure brings new risks

Tying the fund to blockchain infrastructure carries hazards.

ACRED tokens used as collateral are priced at the fund’s daily NAV, which dampens large price swings. However, DeFi risks remain: rising stablecoin borrowing costs, software bugs, or liquidity gaps can still cause losses. Gauntlet provides real‑time monitoring to track these dangers.

Another risk comes from Apollo’s loan book: if the fund’s NAV falls, ACRED will fall too, and large loans backed by sACRED could be liquidated automatically.

Exits may also be tricky. Redemptions are allowed only once each quarter, and Apollo commits to repurchasing at least 5 % of shares. If many investors try to exit at the same time, some requests may be filled only in part.

Because ACRED is on a blockchain, holders can sell their tokens to other buyers at any time, skipping the normal redemption line, something traditional private funds do not allow.

Five years ago, DeFi activity revolved around speculative token pools and “yield farming’’ incentives. Today, blockchain tools are powering products tied to mainstream assets such as corporate loans, pointing to a deeper blend of old and new finance.

“As the space has matured, we have seen different types of investors, whether they’re crossover macro funds, whether they are family offices, or the early TradFi folks who entered on‑chain,” said Reid Simon, head of DeFi and credit solutions at Securitize.

Looking ahead, some industry builders predict that more funds will migrate to blockchain rails. Paul Frambot, co‑founder of the DeFi platform Morpho, which is working with Apollo, says investors will “realize that DeFi’s a miracle infrastructure and they will eventually run their fund on‑chain is my guess.”

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