O2O Capital Partners

Connecting Onchain capital markets with Offchain yield.

[O2O Capital Partners @O2Ocapital]

Today we're launching O2O Capital Partners to accelerate onchain finance and move $1T of bank balance sheet risk onto the fastest growing capital base in the world.

Here's how the two sides of that trade line up:

[O2O Capital Partners @O2Ocapital]

O2O in @CoinDesk 🤝

[Peter Gaffney | O2O Capital @pgaff_digital]

Big thesis of @O2Ocapital's is fixed-rate looping will be one of the largest levers for RWA growth in DeFi

It's largely been untapped (99% of onchain rates are variable) but the growth is undeniable: @Morpho Midnight, @TenorFinance, @formation_so and @kamino Fixed Rates

Ability to match a 6-month 10% RWA against a 6-month 6% fixed loan and capture that spread is a no-brainer versus dealing with spiking variable rates

Institutional Capital will move into this lane fast.

[Peter Gaffney | O2O Capital @pgaff_digital]

Big thesis of @O2Ocapital's is fixed-rate looping will be one of the largest levers for RWA growth in DeFi

It's largely been untapped (99% of onchain rates are variable) but the growth is undeniable: @Morpho Midnight, @TenorFinance, @formation_so and @kamino Fixed Rates

Ability to match a 6-month 10% RWA against a 6-month 6% fixed loan and capture that spread is a no-brainer versus dealing with spiking variable rates

Institutional Capital will move into this lane fast.

[Peter Gaffney | O2O Capital @pgaff_digital]

@O2Ocapital @Morpho Vaults to $100B the next 24 months and RWAs accounting for half of that

Boom

[O2O Capital Partners @O2Ocapital]

We cover vaults like these every two weeks in our vault briefs. Sign up for the next one here:
https://t.co/DrJNf9xSxG

Full October report: https://t.co/nnYUfU99Aj

[O2O Capital Partners @O2Ocapital]

Vaults went from ~$3B to ~$20B in under two years, mostly on @Morpho

>> most of it still earns 4% to 6% on crypto lending
>> our forecast: $22B to $28B by year end
>> the path to $100B runs through real-world yield

Receivables, credit and income ETFs are barely onchain yet 🧵

[O2O Capital Partners @O2Ocapital]

The managers are already showing up.

@BitwiseInvest PAPY took in $8M in its first 24 hours lending against real-world credit. @galaxyhq, @GSR_io and @jpmorgan curate vaults now too.

We think ten asset managers are curating vaults by the end of the year

[WALLY the RWA Elephant 🐘 @wallycollection]

@pgaff_digital @O2Ocapital @BlackRock @circle @FTDA_US @RWA_xyz @DefiLlama 🫡🐘

[Peter Gaffney | O2O Capital @pgaff_digital]

@O2Ocapital @BlackRock @circle @FTDA_US @RWA_xyz @DefiLlama Good data here on stonks in DeFi

[Andy @andrew_fos]

This is why I keep trying to understand onchain lending, the numbers are getting hard to ignore lol

[O2O Capital Partners @O2Ocapital]

@andrew_fos Glad it's helping! That's exactly why we started the Vaults 101 section in this issue. It walks through every role in a vault, curator to sentinel, with real examples. New breakdown every two weeks if you want them in your inbox: https://t.co/DrJNf9xSxG

[O2O Capital Partners @O2Ocapital]

🧵3/3
If $35B of tokenized RWAs is sitting unused in DeFi, who puts it to work?

Our October report maps the onchain buyers and what they're looking for:
https://t.co/nnYUfU99Aj

Get the next one in your inbox: https://t.co/DrJNf9xSxG

[O2O Capital Partners @O2Ocapital]

🧵 1/3
Tokenized isn't the same as liquid.

>> @BlackRock BUIDL: $2.8B onchain, $18M working in DeFi
>> @circle USYC: $2.6B onchain, $32M in DeFi
>> @FTDA_US BENJI: $1.7B onchain, $0 in DeFi

Only $4B of the $39B in tokenized RWAs is put to work in DeFi per @RWA_xyz & @DefiLlama

[O2O Capital Partners @O2Ocapital]

🧵2/3
The products built for DeFi from day one are the ones getting used.

@maplefinance syrupUSDC alone has ~$1B working in DeFi, about a quarter of the total.

Distribution and liquidity is the product. Tokenizing a fund is only the first step

[O2O Capital Partners @O2Ocapital]

@FissionXYZ @PanteraCapital Congrats @FissionXYZ on the $10M raise led by @PanteraCapital. Selling out of a tokenized fund in minutes instead of waiting months on a redemption window is a huge deal for anyone allocating to private credit onchain with any real size. Well deserved

[O2O Capital Partners @O2Ocapital]

Full October report on why vaults need yield that doesn't depend on crypto to get from $20B to $100B:
https://t.co/nnYUfU8BKL

Subscribe for our biweekly vault briefs and research: https://t.co/DrJNf9xkI8

[O2O Capital Partners @O2Ocapital]

Crypto's biggest Earn programs need subsidies to compete.

>> @coinbase High Yield USDC: 3.2% organic + 2.65% Coinbase-funded
>> @RobinhoodApp Earn: ~5% organic + ~2% Robinhood-funded

Offchain, @JPMorganAM $JEPI and $JEPQ pay 8% to 11% with no subsidy. None of it is onchain yet

[O2O Capital Partners @O2Ocapital]

New this issue: a Vaults 101 section that explains curators, allocators, sentinels, caps and timelocks with worked examples.

Get the next brief every two weeks: https://t.co/DrJNf9xkI8

[O2O Capital Partners @O2Ocapital]

@coinbase lends customers up to $100K $USDC against $SOL on @Morpho.

Our 2nd vault brief follows the money onchain to a $34M vault on @base:

- @ClearstarLabs supplies ~80% of the $USDC in the $SOL market
- 217 liquidations, 0 bad debt

Full brief below: https://t.co/lWlNjkDcHN

[O2O Capital Partners @O2Ocapital]

@coinbase lends customers up to $100K $USDC against $SOL on @Morpho. Our 2nd vault brief follows the money onchain to a $34M vault on @base:

- @ClearstarLabs supplies ~80% of the $USDC in the $SOL market
- 217 liquidations, 0 bad debt

Full brief below:

[O2O Capital Partners @O2Ocapital]

@coinbase lends customers up to $100K $USDC against $SOL on @Morpho.

Our 2nd vault brief follows the money onchain to a $34M vault on @base:

- @ClearstarLabs supplies ~80% of the $USDC in the $SOL market
- 217 liquidations, 0 bad debt

Full brief below: https://t.co/lWlNjkDcHN

[O2O Capital Partners @O2Ocapital]

@pgaff_digital @ClearstarLabs @coinbase

[Peter Gaffney | O2O Capital @pgaff_digital]

Issue 02 of our @O2Ocapital vault deep dive is out 🫡

This edition looks at the work @ClearstarLabs is driving for @coinbase Earn

The DeFi mullet is on full display. This is the clearest growth driver for vault TVL as vaults continue to rip towards that $100B marker we love to tout