Onchain Credit Revolution: Centrifuge Brings Wall Street's CLOs to Blockchain
A new onchain credit product has emerged, combining Wall Street's complex CLOs with programmable money. Centrifuge explains how this works through its Janus Henderson Anemoy AAA CLO Fund (JAAA), which has gathered $687 million in assets under management and is available across eight blockchain networks.
CLOs are a type of financial instrument that pools together corporate loans, dividing them into slices with varying levels of risk and reward. The magic lies in the 'waterfall', cash flows from underlying loans get distributed top-down through tranches. Senior tranches, rated AAA, receive payments first, while junior tranches absorb losses but earn higher yields.
The JAAA fund replicates this architecture on blockchain infrastructure, automating much of the investment process and making it accessible to institutional and retail capital. By tokenizing CLOs, Centrifuge aims to bridge traditional finance with cryptocurrency markets.