Aave Founder Proposes DeFi and RWAs to Ease Private Credit Funds’ Liquidity Strain

After the 2008 financial crisis, Basel III raised bank capital requirements, prompting banks to retreat from some higher-risk corporate lending. Private credit firms including Apollo and Blackstone stepped in to fill the gap. The global market is now worth about $2 trillion and provides financing for 80%–90% of leveraged buyouts in the U.S. middle market. High interest rates and AI’s impact on SaaS companies’ debt-servicing capacity have made liquidity risks particularly critical.

In the first quarter of 2026, Blackstone’s flagship BCRED fund received about $3.8 billion in redemption requests, equal to 7.9% of net assets. The company said it met them in full. BlackRock’s HLEND, meanwhile, restricted some withdrawals. In March, Aave founder Stani Kulechov argued that combining DeFi with RWAs could encode redemption, collateral and yield rules in smart contracts, but warned that tokenizing distressed assets could leave onchain investors holding the bag.