Private credit is the next prominent use case of tokenization beyond stablecoins. In the United States alone, private credit assets amount to roughly $1.5T. Despite the scale, the market remains bound by two critical structural frictions: 1) borrowers pledge collateral to custodians and effectively surrender control of the asset, and 2) private credit operates in siloed verticals – agriculture, real estate, commodities, etc - with little interconnection. Onchain private credit is structurally more efficient, and I believe that it’ll transform this asset class. By recording collateral onchain, borrowers receive tokens representing their pledged assets; those tokens can then be reused as collateral in other strategies, unlocking capital efficiency and enabling composability across trading venues. With institutional‑grade risk management, tokenized credit instruments could bridge verticals, allowing capital to flow between sectors that are currently segregated. To demonstrate this concept, @FalconXGlobal, in partnership with @M11Credit and @paretocredit, has tokenized an institutional loan book. Depositors commit USDC to a vault and receive tokenized shares (CV tokens) of the underlying loan portfolio. These tokens can be posted as collateral on Morpho to borrow additional USDC, and the borrowed capital is recycled back into the vault within predefined risk limits. This design turns a conventional credit asset into a dynamic, collateralizable instrument so investors can obtain leverage without liquidating their positions. Although this facility is still small relative to our $1B+ credit book, it demonstrates the potential of tokenized private credit. By combining transparent, 24/7 settlement with composability and controlled leverage, tokenization could connect disparate credit markets and unlock significant capital efficiency. I’m very bullish about bringing private credit markets onchain and excited to innovate!