Tokenizing private credit is a $6 trillion opportunity, and giants like Apollo, KKR and Janus Henderson have deployed products on Avalanche.
Galaxy Digital, the publicly traded crypto financial services company founded by Mike Novogratz, has launched its first-ever tokenized collateralized loan obligation (CLO). The $75 million obligation was issued on the Avalanche network.
The CLO is anchored by a $50 million allocation from Grove, an on-chain credit platform that assigns large capital pools into real-world credit. It’s built on the MakerDAO infrastructure, now rebranded as Sky. Grove is a long-term player in the Avalanche ecosystem, having previously deployed $250 million in tokenized assets real-world assets on the network.
The CLO’s debt tranches were tokenized on the Avalanche blockchain and listed on the INX platform but can only be accessed by qualified investors.
Grove Labs co-founder Sam Paderewski commented:
This transaction marks another meaningful step forward for onchain credit, demonstrating how familiar securitization structures can be brought onchain without compromising institutional standards.
Galaxy’s Chris Ferraro added that the CLO will open a “new avenue for institutional engagement in credit markets, one that benefits from greater efficiency, transparency, and expanded collateral flexibility through onchain execution.”
Galaxy intends to use the funds to purchase outstanding loans from Arch Lending, a crypto lending platform that the company has invested in. It says the CLO could scale to over $200 million in the long run.
According to Galaxy’s announcement, the tokenized CLO is a step forward toward bringing private credit onchain. This unlocks structural transparency and instant settlements, while boosting secondary market liquidity and giving investors greater efficiency with their collateral.
In a parallel announcement, Avalanche noted that asset-backed finance, which falls under private credit, is a $6 trillion business today, and some project it will exceed $20 trillion. And yet, it relies on manual and outdated workflows that are slow, expensive and inefficient.
Blockchain and tokenization changes this, Avalanche stated, adding:
Smart contracts enable automated reporting, enforce structured cash-flow logic, and support ongoing compliance monitoring, reducing the operational burden on both originators and allocators. In parallel, stablecoin-based settlement rails facilitate faster funding and repayment cycles, minimizing idle capital and improving liquidity management.
Avalanche has emerged as one of the frontrunners in this sector. One of its most prominent products is the Janus Henderson Anemoy Treasury Fund, a tokenized fund that holds short-term US Treasury bills. It’s managed by Janus Henderson, a global asset manager with nearly $400 billion in assets under management. Apollo, yet another $500 billion AUM manager, also has a tokenized feeder on the network, as does American private equity giant KKR.
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