Galaxy Launches Tokenized CLO on Avalanche with $50M Allocation from Grove

Galaxy has closed Galaxy CLO 2025-1, a new-issue collateralized loan obligation. This marks Galaxy’s first CLO issuance and will be used to support the company’s lending activities. The transaction reflects Galaxy’s strategy to evolve its lending and asset management capabilities through the debt capital markets, using a familiar institutional framework to scale loan originations and provide investors access to innovative credit products.

The CLO’s debt tranches were issued and tokenized on Avalanche, enabling low-cost, seamless trading. The tokens are listed on INX’s platform and offer market access for qualified investors. Through onchain execution, the structure brings private credit onchain and introduces the potential for instant settlement, full structural transparency, improved secondary-market liquidity, and greater collateral efficiency.

Grove’s Growing Strategy on Avalanche

With a $75 million debut issuance, Galaxy’s tokenized CLO is anchored by a $50 million allocation from Grove, reflecting the next phase of Grove’s onchain credit strategy. Grove’s allocation builds on its initial $250M deployment into tokenized real-world assets (RWAs) on Avalanche. Earlier this year, Grove selected Avalanche as a core partner platform for its institutional credit roadmap, citing the need for predictable settlement, low fees, and performance characteristics suited for programmatic capital operations.

This latest allocation extends that commitment. It expands the range of credit products Grove supports and underscores its intent to operate a meaningful share of its onchain credit activity on the Avalanche network. Rather than a one-off deployment, Grove is establishing a durable, ongoing presence–leveraging Avalanche to modernize credit infrastructure, streamline institutional workflows, and enable the development of new products for both retail and institutional participants.

“This transaction marks another meaningful step forward for onchain credit, demonstrating how familiar securitization structures can be brought onchain without compromising institutional standards,” said Sam Paderewski, Co-Founder at Grove Labs. “Anchoring Galaxy’s debut tokenized CLO underscores Grove’s role in enabling institutional-grade credit to be issued and allocated onchain, and we’re excited to partner with Galaxy and Avalanche to help advance the convergence of traditional credit markets and blockchain-based infrastructure.” 

The Role of Tokenization in Private Credit

Private credit, and asset-backed finance (ABF) in particular, has grown into one of the largest segments of global capital markets. ABF alone represents an estimated $6.1 trillion today, with the total addressable market projected to exceed $20 trillion. Yet despite its scale, much of the sector continues to rely on manual, resource-intensive workflows that slow capital deployment, increase operational overhead, and constrain efficiency.

Blockchain, tokenization, and smart contracts introduce the potential for a more streamlined operating model. Smart contracts enable automated reporting, enforce structured cash-flow logic, and support ongoing compliance monitoring, reducing the operational burden on both originators and allocators. In parallel, stablecoin-based settlement rails facilitate faster funding and repayment cycles, minimizing idle capital and improving liquidity management. 

When applied to structured credit, onchain issuance extends these advantages to some of the market’s most complex and least standardized instruments. Web3 technology provides a modern framework for managing collateral, lifecycle events, and investor operations with greater transparency, programmability, and control, unlocking efficiencies that are difficult to achieve with legacy infrastructure. Structured credit products issued onchain extend these benefits to traditionally complex instruments, offering a modernized framework for managing collateral, lifecycle events, and investor operations.

Why Avalanche Is Being Chosen for Credit and Structured Products

Avalanche delivers the performance and reliability required for institutional credit and structured products. With deterministic finality, high throughput, and low, predictable fees, the network supports workflows that depend on consistent settlement and frequent lifecycle events. Its EVM compatibility allows asset managers and infrastructure providers to use familiar tooling while operating strategies in a more efficient, programmable environment.

This is reflected in the growing set of institutional products already live on Avalanche. Janus Henderson’s Anemoy funds, issued via Centrifuge, operate natively on the network and demonstrate how structured credit and treasury products can be managed onchain. Apollo’s tokenized feeder into its Diversified Credit Fund (ACRED) runs daily NAV, subscriptions, and redemptions on Avalanche, showing that large-scale private credit strategies can be supported on public blockchain infrastructure. KKR’s tokenized exposure to its Health Care Strategic Growth Fund II represents one of the earliest instances of a major alternative investment strategy distributed on a public blockchain. In parallel, emerging infrastructure providers such as SemiLiquid have selected Avalanche to support programmable credit workflows that require deterministic settlement and institutional-grade controls.

Across these deployments, a consistent pattern has emerged: when institutions need accurate, repeatable settlement, high-frequency lifecycle management, and automation across complex financial workflows, they are increasingly turning to Avalanche.

A Step Forward for Institutional Onchain Credit

Grove’s $50M commitment to Galaxy’s tokenized CLO advances the maturation of institutional credit, bringing structured credit further onto Avalanche and signaling how allocators are integrating onchain infrastructure into core portfolio construction.