TredFi credit reached pmf faster than T-stocks (Tokenized stocks). Even now, despite all the hype and attention around T-stocks, the gap in total distributed values is still significant: $7.31B vs 2.34B, roughly 3x apart. Tradfi credit may not own the timeline but the value add from its target audience is exponential. So who’s buying tokenized credits? The boys at @ArrakisFinance answered that question : onchain institutions Demand is pouring in from deep pockets onchain so it matters little whether or not these assets dominate mindshare on the timeline. You probably have never heard of JAAA, for example, but according to Arrakins it had a median institutional cheque of $29.1M across the sample they analyzed. Allocators like @SkyEcosystem, @ethena and @ResolveLabs use the yield generated from these credit pools to power entire onchain products, primitives and strategies,, including things like primeUSD and USDS I also think adoption couldn’t have happened at a better time. For years, onchain markets had limited options for real-yield products that offered relatively low volatility and low correlation with the crypto market. I was bullish on @solomon_labs $USDV for this exact reason. Unfortunately, they couldn’t bring a fully ready product to market quickly enough, and AAA CLO allocators + other credit strategies have since eaten their lunch. While onchain capital is hungry for the assets, TradFi is simulteanously experimenting and adopting the distribution and settlement technology that blockchain provides. Thus creating an asymmetric but complementary dynamic. Onchain markets get access to assets that generate relatively stable, uncorrelated yield. TradFi credit gets better efficiency, new distribution channels, fractionalization and, eventually, composability. But there’s a critical bottleneck standing in the way of broader retail adoption: Liquidity and duration risk. DeFi money markets are a risky way to gain exposure to credit yield because they often treat the asset class like highly liquid crypto collateral when it clearly isn’t. Tokenization doesn’t automatically create liquidity. It’s therefore insufficient to “just tokenize and list on Morpho.” The same problem applies to credit products and strategies that lack proper credit architecture and liquidity controls. The result is usually one of two things: you can’t leverage the asset at all, or when you can, the position is extremely fragile. Here’s a good example scenario from @_jamico: xitter.cf/_jamico/status/2087980… This is fast becoming a problem worth paying attention to. The more credit moves onchain, the more important the infrastructure that manages liquidity, redemptions and leverage becomes. Protocols building around these risks are super valuable but no one is paying attention yet. Here are some you should have on your radar ➤@3f_xyz: solves liquidity in longer duration asset and one shots leveraged-looping ➤@multiliquid_xyz: enables liquidity providers to power instant redemptions/swaps to stablecoins ➤ @FissionXYZ : provides liquidity through a dedicated redemption and secondary liquidity infrastructure ➤ @RavaMoney: provides liquidity at loan origination + acts as a liquidation aggregator ➤ @agra_gg: provides liquidity via a continuous secondary markets for collateral assets These are not nice-to-have products If tokenized credit are going to be uable by retail, this is the risk infrastructures that will make it possible. Once the asset are onchain and the market is primed for adoption, the next stage of growth won’t be determined by who can tokenize the most assets. It’ll be determined by who can solve the liquidity, duration and composability problems that come after tokenization.