More investors are exploring “exotic” assets as onchain credit markets, RWAs and AI unlock new oppor

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The credit market is not known for speed. Today, accessing credit requires lots of filing, paperwork and often a headache or two. But that may change soon as progress in decentralized finance shakes up how things have been done for centuries.

That progress is coming in the form of lending protocols, which promise to unlock liquidity almost instantly using DeFi infrastructure, allowing users to borrow against assets within seconds rather than weeks.

“Anybody who has access to the internet should be able to access this technology we're building,” @0xJHan, CEO of @eulerfinance, a borrowing and lending vault infrastructure firm, said on @TokenRelations' @_TalkingTokens podcast recently.

At Euler, Han is focusing on building what he describes as the foundational credit layer for the internet.

“The largest unlock is to retail because they don't even know they can easily get access to liquidity or stablecoins through their assets,” Han said. “So now using crypto, they can sometimes do it in seconds, instead of filing for months, or [undergoing] credit checks and waiting for a long time to go to the in-person facilities at the branches.”

While DeFi applications open the door for the average retail user to avail credit quickly, they also create opportunity for institutions that have been bogged down by slower infrastructure and toolkits.

“Sometimes [institutions] cannot unwind and get into a position at that speed that they want,” Han noted. “So with crypto and the interoperability that we have, they can do some innovative and fast-moving stuff.”

Some of the fastest growing areas bridging this gap include real-world assets (RWAs) and tokenized access to credit.

One such fund is Apollo Global Management’s private credit fund, Apollo Diversified Credit Securitize Fund (ACRED), which the asset management firm tokenized in late January 2025. The fund has about $131.33 million in assets under management, with about a 8.77% one-year return, as of February 27. The fund’s NAV has continued to grow steadily since inception, as shown below.

Apollo was one of the first large traditional financial institutions to get into DeFi, but other institutional investors continue to explore use cases that are enabled by crypto, spurred by significant market interest.

In mid-February, Euler integrated @Securitize’s DS Protocol, which allows for digital securities (DS) tokens to be used as collateral in “curated, risk-isolated lending markets,” on the DeFi lending protocol, the companies said in a press release.

“It's a very compliant digital representation of real financial instruments,” Han explained. “So the holder of the DS token actually represents their real ownerships of the underlying financial assets. This is a more compliant version of some traditional RWAs that we're currently seeing in this space.”

Han thinks DS tokens are going to “grow significantly” this year as a gateway to onboard financial institutions. He says the main concern from large financial institutions is about compliance and security, but DS tokens lower risk at the smart contract level by eliminating intermediary and counterparty errors.

“Now, they can kind of expand beyond their crypto footprint,” he added. ”I think that's what this really unlocks.”

Retail investors’ appetites are evolving, too, as they learn about what they’re investing in and therefore go about doing so thoughtfully.

Now, retail investors are exploring new avenues: buying options on gold, looking into real estate funds, and investing in crypto via instruments like ETFs and stablecoins.

Going forward, risk appetite will continue to be a mixed bag for both institutional and retail investors, as not everyone will be into only vanilla stocks or crazy alternative assets. In general, though, Han expects to see a shift.

“More and more people are getting into the exotic stuff,” he said. “Earlier, the barrier was access and education.”

Now, there’s a plethora of crypto and AI tools and infrastructure at people’s fingertips, which has opened the door for professionals and regular investors alike to have more financial freedom.

All in, if the market and infrastructure continues to develop, the onchain lending layer could continue to connect traditional markets, digital assets and investors in ways that were previously not possible.