Apollo Hits $100 million with Tokenized Credit Fund Driving DeFi Leverage

@Techa, this matter is related to blockchain technologies and DeFi infrastructure, so I’m assigning it to you.

Key Event:
Apollo Global Management, a major asset manager overseeing $785 billion, has partnered with Securitize to launch ACRED, a tokenized credit fund leveraging blockchain technology. This innovative fund allows investors to receive tokens tied to private credit loans and offers composability through DeFi platforms. Investors can mint a secondary token, sACRED, as collateral to borrow stablecoins, amplifying returns but introducing risks like DeFi system vulnerabilities and loan performance fluctuations. The move reflects Wall Street’s broader adoption of blockchain to access new financial opportunities and bridge traditional and decentralized finance.

Of course, I can certainly explain that. The process of using sACRED to leverage returns is a rather fascinating example of how decentralized finance, or DeFi, is intersecting with traditional financial assets. It’s a multi-step process that I can break down for you.

First, an accredited investor with a minimum of $50,000 would invest in the Apollo Diversified Credit Securitize Fund, also known as ACRED. This is a tokenized feeder fund that gives the investor exposure to Apollo's portfolio of loans to medium-sized U.S. companies. Instead of a paper statement, the investor receives their stake as ACRED tokens in a digital wallet. These tokens are available on several blockchains, including Solana, Ethereum, and Polygon.

Now, to the leveraging part. The ACRED tokens themselves aren't directly used in most DeFi protocols. Instead, an investor can "mint" a secondary token called sACRED. Think of sACRED as the DeFi-compatible version of your investment.

With these sACRED tokens, an investor can then use them as collateral on various DeFi lending platforms. They can borrow stablecoins, which are cryptocurrencies pegged to the U.S. dollar, against their sACRED holdings.

Here’s where the "loop" comes in, a strategy to magnify returns. The borrowed stablecoins can be used to purchase more ACRED tokens. These new ACRED tokens can then be converted into more sACRED, which can then be used as additional collateral to borrow even more stablecoins. This cycle can be repeated to increase an investor's exposure to Apollo's loan portfolio, which can amplify potential returns. Some platforms even automate this "looping" process through smart contracts.

Essentially, this strategy allows an investor to earn the interest from the underlying loans in the Apollo fund and potentially generate additional gains through these leveraged DeFi activities. For instance, while the standard ACRED fund might yield between 8-9%, a leveraged strategy using sACRED could potentially generate returns of up to 16%.

It's a prime example of "composability" in DeFi, where different financial components can be combined in innovative ways that aren't typically possible in traditional finance.

However, it's very important to understand that this increased potential for return comes with a separate layer of risk. These risks include the volatility of the crypto market, potential vulnerabilities in the DeFi software, and the performance of the underlying loans in Apollo's portfolio. If the value of the ACRED fund were to fall, it could trigger automated liquidations of the sACRED used as collateral.

Hi Techa,

For your article, focus on clearly explaining the core event: how sACRED is being used by accredited investors to amplify returns through DeFi leveraging. Start by concisely outlining the process—investment in ACRED, tokenization into sACRED, and its role as collateral in DeFi lending platforms. Use plain language to describe the leveraging "loop" strategy, highlighting both the amplified returns (up to 16%) and associated risks, such as liquidation and market volatility. Avoid overloading with technical details; prioritize clarity and relevance for readers unfamiliar with DeFi concepts. Keep it tight and actionable! Let me know if you need more guidance.

– Lilly

Apollo Hits $100M with Tokenized Credit Fund Driving DeFi Leverage

• Accredited investors can amplify returns via sACRED, a DeFi-compatible token.
• The blockchain-based strategy highlights Wall Street's growing embrace of decentralized finance.

On July 21, 2025, Apollo Global Management, a prominent asset manager overseeing $785 billion in assets, collaborated with Securitize to launch the Apollo Diversified Credit Securitize Fund (ACRED), CoinDesk reported. This groundbreaking initiative tokenizes private credit investments, enabling accredited investors to use blockchain technology for enhanced financial strategies. The ACRED fund provides exposure to loans for medium-sized U.S. companies and introduces an innovative secondary token, sACRED, which integrates with decentralized finance (DeFi) platforms to amplify returns through leveraging strategies.

Apollo and Securitize announced that each ACRED investment—requiring a minimum of $50,000—would deliver digital tokens representing an investor’s stake in the diversified loan portfolio. Instead of traditional paperwork, investors receive ACRED tokens, which are available on blockchains such as Ethereum, Solana, and Polygon. These tokens signify a pivotal shift from conventional financial instruments by facilitating access to DeFi systems.

To amplify portfolio potential, accredited investors can mint sACRED, a derivative token designed for compatibility with DeFi protocols. By using sACRED as collateral on lending platforms, investors borrow stablecoins—cryptocurrencies tied to the U.S. dollar—and reinvest in additional ACRED tokens. This cyclical process, automated through smart contracts and known as "looping," empowers holders to leverage their investments, potentially yielding higher returns. While standard ACRED investments may generate 8-9%, the compounding effects of leveraging with sACRED could push yields as high as 16%.

Nonetheless, this strategy comes with inherent risks. Leveraging introduces vulnerabilities related to crypto market volatility, the stability of DeFi protocols, and performance fluctuations in the underlying loan assets. If the ACRED fund’s value drops significantly, automated liquidations could occur, risking investor collateral. Despite these challenges, Apollo's move underscores Wall Street’s accelerating adoption of blockchain technologies, further bridging traditional finance with the DeFi ecosystem.

As of July 21, 2025, ACRED tokens were actively utilized across decentralized platforms, marking a milestone in their integration within the blockchain space. Future dynamics surrounding ACRED's adoption could redefine opportunities in financial technology.