Private Credit & Tokenized Credit

1. What private credit is

Private credit is debt issued outside of public markets — loans made directly by non-bank lenders (specialty finance companies, private-credit funds, insurance companies, family offices) to companies or assets. It's the alternative to a syndicated bank loan or a public bond issuance.

The core sub-strategies:

Strategy	Typical borrower	Yield	Risk profile
Direct lending (senior secured)	Middle-market PE-owned company ($10M-$100M EBITDA)	SOFR + 5-7%	1st lien, sponsor-backed, covenanted
Mezzanine	Same borrower, subordinated tranche	10-14%	Subordinated to senior, often with equity kicker
Distressed / special situations	Company in workout or bankruptcy	15-25%+	High expected return, high loss probability
Trade finance	Importers/exporters needing short-term working capital	8-15%	Short-duration, collateralized by inventory / receivables
Invoice / receivable finance	SMB with slow-paying customers	10-20%	Very short duration, obligor-diversified
Revenue-based finance	Recurring-revenue software business	15-25% IRR target	Return tied to revenue percentage, not fixed schedule
Asset-based lending	Company with hard-asset collateral	SOFR + 4-8%	Loan-to-value dictated, monitored monthly

2. Why credit tokenizes well

Credit has natural properties that make it easier to tokenize than equity:

Cash flows are contractual. A loan pays a predetermined stream. Token-holder rights are cleaner to define than equity.
Payment mechanics are automatable. Interest can be paid on schedule via smart contract from a designated funding wallet.
Underwriting is standardizable. LTV, DSCR, covenant compliance are all computable metrics that can be monitored on-chain.
Secondary trading has natural demand. Institutions constantly rebalance credit exposure. Tokenization reduces settlement time from T+3 (traditional) to T+0 (on-chain).

3. The on-chain credit protocols

Five protocols dominate on-chain credit as of 2026:

Goldfinch

Emerging-market credit — loans originated in Africa, Southeast Asia, LatAm. Underwriting by specialized "backers" who evaluate borrowers. Senior/junior tranche structure. Yield to senior LPs typically 8-13%.

Centrifuge

Asset-backed credit tokenization. Real-world receivables (invoices, mortgages, trade finance) tokenized into pools, financed by liquidity providers. Now expanded to permissionless V3.

Maple Finance

Institutional undercollateralized lending. Delegates pool capital, underwrite institutional borrowers (crypto market makers, prime brokers). Focus on quality of borrower rather than collateral.

Aave Horizon (RWA)

Aave's institutional RWA pool — permissioned participation, KYC'd, focused on real-world collateral for on-chain borrowing. Tokenized T-bills as primary collateral in initial version.

Clearpool

Unsecured institutional lending with dynamic pool rates. Borrowers create single-borrower pools; LPs deposit. Interest rate float based on utilization.

TrueFi

Unsecured lending to KYC'd institutional borrowers. Earlier entrant that pivoted after 2022 borrower defaults. Now operating with stricter underwriting + insurance.

See the full Active Deals registry for current AUM, yield, and regulatory status of each.

4. The tokenized-treasury layer (adjacent)

Related but distinct: the tokenized US Treasury / money-market fund category. These are not "credit" in the traditional sense — they hold government paper — but they use the same on-chain issuance rails and often serve as the reserve asset for tokenized-credit protocols.

Ondo (OUSG, USDY). Tokenized short-term Treasury exposure. USDY is a yield-bearing stablecoin equivalent.
Superstate (USTB, USCC). Registered investment company (1940 Act mutual fund) with on-chain share registry.
Franklin Templeton (BENJI). First SEC-registered fund with a public blockchain share class.
Hashnote (USYC). Institutional short-duration credit / T-bill exposure.
BlackRock (BUIDL). Institutional cash-management fund with Securitize as transfer agent.

5. Legal structure — issuing a tokenized-credit fund

For a US operator issuing a tokenized private-credit fund, the typical stack:

Fund entity: Delaware LP or LLC, master + feeder for tax-efficient structuring.
Adviser entity: Delaware LLC, registered as ERA (Exempt Reporting Adviser) under 203(m) if AUM under $150M; full RIA registration above.
Offering: Rule 506(c) private placement + 3(c)(1) or 3(c)(7) exclusion from ICA registration.
Token infrastructure: Securitize, INX, or similar transfer-agent-registered platform for the on-chain share ledger.
Custody: Qualified custodian for the tokens (Anchorage, BitGo Trust, Fireblocks under state trust charter).
Administration: Independent fund administrator for NAV calculation, subscriptions/redemptions, K-1 preparation.