Sky Protocol has launched Grove, a new institutional-grade decentralized finance (DeFi) credit protocol, supported by a $1 billion investment into tokenized credit. Grove is part of the Sky (SKY) ecosystem and is designed to bridge the gap between on-chain DeFi protocols and traditional finance by enabling access to institutional credit assets onchain.
The $1 billion capital is allocated to the Janus Henderson Anemoy AAA CLO Strategy, a fully tokenized collateralized loan obligation (CLO) fund managed by the same team overseeing Janus Henderson’s $21 billion AAA CLO ETF, in collaboration with Centrifuge. This allows DeFi participants to invest in a traditionally off-chain asset class that offers yield stability and capital preservation, marking the first fully onchain CLO investment strategy deployment.
Grove serves as a capital routing layer facilitating deployments of idle crypto reserves into diversified, regulated real-world assets, without compromising decentralization or flexibility. The protocol’s development involved seasoned professionals from traditional finance and DeFi backgrounds, including firms such as Citigroup and Deloitte.
Grove is part of Sky’s broader Endgame strategy, aiming to modularize its protocol into independent units called “Stars”, with Grove and Spark among the first. The protocol’s launch highlights growing institutional appetite and investor demand for tokenized fixed-income products within DeFi, complementing the expanding market for tokenized U.S. Treasury assets.
The integration opens new avenues for DeFi protocols to generate sustainable yields from high-quality real-world credit and supports the long-term stability and growth of Sky’s ecosystem, including its DAI stablecoin backing. While challenges such as regulatory compliance and technical integration remain, Grove’s success signals a maturing DeFi landscape that is increasingly merging with traditional finance markets, fostering a more robust and inclusive global financial environment.