Sky Protocol’s decentralized finance (DeFi) network has unveiled Grove, a groundbreaking institutional-grade credit protocol backed by a $1 billion investment in tokenized credit. This initiative marks a pivotal step in bridging traditional finance (TradFi) and blockchain-based financial solutions.
Grove: Revolutionizing Institutional Credit in DeFi
Grove, developed within the Sky Ecosystem, was officially announced on June 25. The protocol is designed to function as a capital routing layer, connecting onchain protocols with traditional asset managers. Key features include:
- Tokenized CLO Strategy: Grove’s inaugural investment vehicle, the Janus Henderson Anemoy AAA CLO Fund, is the first fully onchain collateralized loan obligation (CLO) strategy, managed by the team behind Janus Henderson’s $21 billion AAA CLO ETF.
- Non-Custodial Infrastructure: Enables flexible capital allocation while keeping assets within the blockchain environment.
- Regulated Diversification: Crypto-native projects can deploy idle reserves into diversified, regulated vehicles without offboarding from blockchain.
Strategic Backing and Vision
Grove is spearheaded by a consortium of TradFi and DeFi veterans from Citigroup, Deloitte, Blocktower Capital, and Hildene Capital, incubated by Grove Labs (a division of Steakhouse Financial).
Sam Paderewski, Grove Labs Co-Founder, emphasized:
“The launch of Grove, supported by Sky’s $1 billion allocation, demonstrates how protocols can now access liquid, institutional-grade credit without compromising decentralization or flexibility.”
The Rise of Tokenized Fixed-Income Assets
Grove’s launch aligns with surging demand for tokenized yield-generating assets:
- The tokenized U.S. Treasury market grew from $500 million to $7.3+ billion since 2023.
- Janus Henderson’s prior success with the JTRY Tokenized Treasury Fund paved the way for this CLO strategy.
Nick Cherney, Head of Innovation at Janus Henderson, stated:
“With Grove’s infrastructure, we’re expanding global access to structured credit. Tokenizing this strategy is a major leap toward integrating TradFi products into DeFi.”
Sky Ecosystem’s Endgame Strategy
Grove joins Spark as the newest “star” in Sky’s modular ecosystem, reflecting its broader Endgame Strategy:
- Decentralized Network Goal: Sky co-founder Rune Christensen aims to build an open, decentralized capital network. Grove adds asset diversity to Sky’s real-world asset (RWA) portfolio.
- Roadmap: Grove will continue bridging asset managers and crypto protocols, enhancing DeFi liquidity.
👉 Discover how Grove is reshaping institutional DeFi
FAQ
1. What is Grove’s primary function?
Grove acts as a capital routing layer, linking DeFi protocols with TradFi asset managers via tokenized credit instruments like CLOs.
2. How does Grove ensure decentralization?
Its non-custodial design allows capital allocation without transferring assets offchain, maintaining blockchain-native flexibility.
3. Why is tokenized credit significant for DeFi?
Tokenization unlocks institutional-grade assets (e.g., CLOs, Treasuries) for DeFi, combining TradFi stability with blockchain efficiency.
4. What’s next for Grove?
The protocol will expand its role as a liquidity bridge, fostering deeper integration between traditional and crypto markets.