Grove Finance is making waves in the DeFi space, and their recent appearance at Devconnect in Buenos Aires highlights just how far they've come. In a special episode from The Rollup, hosts Rob and Andy chatted with Kevin Chan, co-founder of Grove Finance, about their explosive growth to $2 billion in total value locked (TVL) and their innovative approach to bringing real-world assets (RWAs) on-chain.

This interview, broadcast live from the event, sheds light on how Grove is injecting real capital into the US economy through tokenized collateralized loan obligations (CLOs). If you're new to the term, CLOs are basically bundles of loans—think corporate debt packaged together and sold to investors. Tokenizing them means turning these traditional financial instruments into digital assets that can live and trade on blockchain networks, opening up new opportunities in DeFi.

What Are CLOs and Why Tokenize Them?

Kevin kicks off by explaining CLOs in simple terms: they're structured credit products where loans to companies are pooled and tranched into different risk levels. The top tranche, like the AAA-rated ones from Janus Henderson that Grove has brought on-chain, is super safe and offers stable yields.

The big win here? Tokenization allows these assets to interact seamlessly with DeFi protocols. Grove has already onboarded $1 billion in Janus Henderson AAA CLOs, making high-quality credit accessible to crypto users without the usual barriers of traditional finance.

Avoiding Conflicts in RWA Lending

One key challenge in RWAs is managing conflicts of interest, especially in lending. Kevin discusses how Grove avoids off-chain recursive lending—basically, preventing scenarios where borrowed funds loop back in ways that create instability. By keeping everything on-chain and transparent, they ensure fair play and reduce risks.

Grove's Competitive Edge

What sets Grove apart? Their focus on institutional-grade infrastructure. Kevin highlights partnerships with heavyweights like BlackRock and Apollo, which bring credibility and scale. Plus, their work on Plume, where Apollo deployed $50 million in private credit, shows how they're expanding beyond basic tokenization.

Interestingly, Grove's stablecoin USDS has now surpassed USDE in supply, signaling strong adoption. This ties into their all-weather yield strategy, which goes beyond volatile basis trades to provide consistent returns regardless of market conditions.

Navigating the Sky Star Wars

The interview touches on the competitive "Sky star wars"—a nod to the heated rivalry in the Sky ecosystem (formerly MakerDAO). Grove is positioning itself as a leader by diversifying assets and avoiding concentration risks. Kevin emphasizes that spreading out investments beats putting all eggs in one basket, especially in volatile crypto markets.

At the bottom of the live stream, a ticker scrolled with various crypto assets, including meme tokens like YEET, TRUMP, and LAVA, alongside established ones like BTC and MKR. This mix underscores how RWAs like Grove's CLOs are part of a broader ecosystem where memes and serious finance coexist, potentially stabilizing yields for all participants.

If you're into DeFi or curious about how TradFi is merging with blockchain, this episode is a must-watch. Check out the full interview on The Rollup's X post or catch it on YouTube, Spotify, or Apple Podcasts for more deep dives into crypto innovations.