Private loans on the blockchain are considered the next revolution in the world of finance.

In recent years, we have seen major shifts in how traditional assets transition to the digital world. Initially, we brought the dollar to chains via stablecoins like USDC and USDT. Then we moved to a bigger step: bringing government bonds, such as U.S. Treasury bonds, to the blockchain with fixed returns of 5%.

Today, we are facing a deeper and bolder third wave, which is bringing private credit loans — high-yield loans ranging from 8% to 12% — into the world of blockchain through decentralized finance (DeFi) tools.

How did we bring bonds to the blockchain?

Initially, large financial companies created digital tokens representing ownership of real treasury bonds.
The process was as follows:

  • Investor funds are collected via blockchain.

  • These funds are used to purchase real government bonds in traditional markets.

  • Companies like Franklin Templeton and Ondo Finance issue digital tokens that represent each investor's share of these bonds.

  • Token holders receive periodic returns derived from the interest paid by the original bonds.

This way, any investor in the world can easily access the U.S. Treasury bond market, which was previously restricted to large investors or those with U.S. bank accounts.

Practical examples of these innovations include:

  • Franklin OnChain U.S. Government Money Fund (FOBXX) via the Stellar network.

  • Ondo Short-Term U.S. Treasuries (OUSG) on the Ethereum network.

  • Matrixdock STBT issues tokens backed by short-term treasury bills.

The result?
Tradable bonds 24/7, without banking intermediaries, and with complete transparency on the blockchain.

What do we mean by private loans?

Private loans are simply financing done outside the traditional banking framework.
Instead of borrowing from banks, companies go directly to investment funds or institutional investors to obtain loans with special terms and higher returns.
Historically, this market was closed to ordinary investors, confined within narrow circles, and required massive capital.

The term RWA refers to "real assets on the blockchain."
It is the new trend that seeks to convert real-world assets (money, bonds, real estate, loans...) into digital tokens that can be traded and owned easily on decentralized networks.
Bringing private loans to the blockchain is a natural evolution of this movement, but with a higher degree of complexity and yield.

Where do DeFi vaults come into the picture?

Instead of the complex individual entry into these loans, smart vault solutions have emerged in DeFi.
These vaults act as funding vehicles:

  • It collects investor funds from around the world.

  • It automatically directs them to reliable private loans through smart protocols.

  • It later distributes the returns in a transparent and automated manner, without third-party intervention or banking bureaucracy.

This way, anyone can own a part of a private credit portfolio, at lower costs, and with ease that was not previously possible.

Why is this step a true revolution?

  • It opens the door for small and medium investors to access high-yield markets.

  • It injects massive new liquidity into DeFi and redefines its role away from random speculation.

  • It takes a new step toward complete disconnection from traditional banks and institutions.

  • It brings global financing into an era of complete transparency, where every loan is tracked, and every risk is understood through smart contracts.

What is happening now resembles what ETF funds did 20 years ago.
At that time, complex and hard-to-access markets (like gold and international stocks) were transformed into investment instruments available to everyone at the click of a button.
Today, blockchain plays the same role — but not only for traditional markets, but for assets that were not originally available to the public.

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