The decentralized finance (DeFi) landscape has taken a major leap forward with the official launch of Grove, a new institutional-grade credit protocol developed under the Sky (SKY) ecosystem. Backed by a substantial $1 billion allocation, Grove is set to bridge the gap between traditional finance (TradFi) and blockchain-based financial systems by bringing high-quality, tokenized credit products onchain.
This milestone marks a pivotal moment in DeFi’s evolution—transitioning from speculative markets to infrastructure capable of supporting regulated, yield-generating real-world assets.
Introducing Grove: A Capital Routing Layer for DeFi
Grove functions as a decentralized capital routing layer, connecting onchain protocols with established traditional asset managers. Its core mission is to enable crypto-native projects to deploy idle reserves into diversified, compliant financial instruments—without ever leaving the blockchain environment.
At launch, Sky allocated $1 billion to Grove for investment into the Janus Henderson Anemoy AAA CLO Strategy, a fully tokenized fund created in partnership with Centrifuge. This makes it the first-ever collateralized loan obligation (CLO) strategy deployed entirely onchain.
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The JAAA fund is managed by the same team overseeing Janus Henderson’s $21 billion AAA CLO ETF, ensuring professional oversight and adherence to traditional risk management standards. By leveraging blockchain technology, the fund offers transparency, programmability, and global accessibility—while maintaining the capital preservation and yield stability that define top-tier fixed-income products.
Bridging TradFi Expertise with DeFi Innovation
Grove was incubated by Grove Labs, a division of Steakhouse Financial, in collaboration with a founding team composed of veterans from leading institutions including Citigroup, Deloitte, BlockTower Capital, and Hildene Capital. This blend of Wall Street experience and crypto-native innovation positions Grove at the forefront of the tokenized asset revolution.
The protocol operates as a non-custodial system, allowing for flexible capital allocation while preserving user control. This design aligns with DeFi’s core principles: decentralization, transparency, and permissionless access.
“Demand for high-quality, yield-generating assets onchain is growing,” said Sam Paderewski, co-founder of Grove Labs. “The launch of Grove, backed by a $1 billion allocation from Sky, shows how protocols can now access liquid, institutional-grade credit without compromising decentralization or flexibility.”
Advancing Sky’s Endgame Strategy
Grove’s emergence as a standalone module within the Sky ecosystem underscores the protocol’s broader Endgame vision—a multi-year initiative to restructure Sky into independent, interoperable units known as “Stars.” These modular components aim to create a decentralized capital network capable of integrating diverse real-world assets (RWAs) into DeFi.
With Grove joining Spark as one of the first Stars, Sky is accelerating its integration of tokenized RWAs, expanding beyond stablecoins and lending markets into structured credit and institutional finance.
Rune Christensen, co-founder of Sky, emphasized the long-term ambition: “Our goal has always been to build an open, decentralized capital network. Grove’s launch advances that mission by adding a new layer of asset diversity to our real-world asset portfolio.”
The Rise of Tokenized Fixed-Income in DeFi
The timing of Grove’s launch reflects a surging demand for tokenized fixed-income products. Since 2023, the market for tokenized U.S. Treasuries alone has exploded—from $500 million to over $7.3 billion—demonstrating strong appetite among crypto investors for low-volatility, yield-bearing assets.
Grove builds on this momentum by introducing a more sophisticated offering: an actively managed CLO strategy with diversified underlying loans and rigorous credit evaluation processes. Unlike passive Treasury funds, the JAAA strategy provides exposure to senior tranches of leveraged loans, historically offering attractive risk-adjusted returns.
👉 See how DeFi is unlocking new yield opportunities through real-world asset tokenization.
Nick Cherney, Head of Innovation at Janus Henderson, highlighted the significance: “With Grove’s infrastructure, we’re expanding global access to structured credit. Tokenizing this strategy is a major step toward integrating traditional financial products into DeFi.”
This collaboration follows Janus Henderson’s prior success with Centrifuge in launching JTRSY, a tokenized Treasury fund. That initiative proved the viability of asset tokenization and laid the groundwork for more complex instruments like the JAAA CLO.
Core Keywords Driving Adoption
As DeFi matures, several key themes are shaping its trajectory:
- Tokenized real-world assets (RWAs)
- Institutional-grade DeFi
- Onchain credit protocols
- Decentralized capital markets
- Structured credit tokenization
- Non-custodial asset management
- DeFi yield diversification
- Blockchain-based fixed income
These keywords reflect both user search intent and the strategic direction of leading protocols like Sky and Grove. Their natural integration into financial narratives helps improve discoverability while delivering value-aligned content.
Frequently Asked Questions (FAQ)
Q: What is Grove in the context of DeFi?
A: Grove is a decentralized credit infrastructure protocol developed under the Sky ecosystem. It enables crypto-native platforms to invest idle capital into tokenized, institutional-grade credit products—such as CLOs—while remaining fully onchain.
Q: How does Grove differ from other DeFi lending platforms?
A: Unlike peer-to-peer or algorithmic lending protocols, Grove focuses on integrating professionally managed, off-chain financial instruments into DeFi. It acts as a bridge between traditional asset managers and blockchain-based capital pools.
Q: Is the $1 billion investment from Sky directly funding loans?
A: No. The $1 billion is allocated to purchase shares in the tokenized Janus Henderson Anemoy AAA CLO Strategy. This capital supports a regulated fund backed by high-quality collateralized loan obligations.
Q: Can individual investors participate in Grove’s offerings?
A: Initially, participation is structured through integrated DeFi protocols that deploy reserves via Grove’s infrastructure. Future developments may expand access to retail users through compliant onramps.
Q: What role does Centrifuge play in this launch?
A: Centrifuge provides the underlying asset tokenization platform used to mint and manage the JAAA fund tokens. Their infrastructure ensures legal enforceability and seamless integration with DeFi ecosystems.
Q: Why are CLOs significant for DeFi?
A: CLOs offer diversified exposure to corporate debt with strong credit ratings. Bringing them onchain introduces higher-yielding, regulated assets to DeFi—enhancing portfolio stability and attracting institutional interest.
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Looking Ahead: Grove as a Liquidity Engine for DeFi
As part of its roadmap, Grove plans to onboard additional asset managers and launch new tokenized strategies across credit, private debt, and structured finance. By facilitating seamless capital flows between TradFi institutions and DeFi protocols, Grove aims to become a primary liquidity engine for the decentralized economy.
This shift isn’t just about yield—it’s about building a resilient, globally accessible financial layer rooted in transparency and efficiency. With strong backing, experienced leadership, and strategic partnerships, Grove represents a bold step toward mainstream financial integration.
For developers, investors, and institutions alike, the message is clear: the future of finance is onchain—and it’s being built today.