Crypto venture firm Framework Ventures has partnered with mortgage services company Better to help it launch a $500 million plan to integrate with the decentralized finance protocol Sky, formerly MakerDAO.
Better said on Monday that Framework would help it provide $500 million in credit to Sky’s stablecoin ecosystem, enabling it to launch tokens tied to mortgages that would generate yield.
Framework Ventures co-founder Vance Spencer said real-world assets are “one of the most important frontiers in decentralized finance, and government-backed conforming mortgages are one of the largest real-world asset classes in the world.”
The plan comes amid a broader interest in tokenization from traditional finance companies, with firms such as BlackRock dabbling in tokenization for money market funds.
Tokens only for accredited investors, but will expand
Fortune reported on Monday that Framework also struck a deal to buy 10% of Better’s stock, currently valued at about $45 million, and that the planned tokens would initially be available only to accredited investors.
Better founder and CEO Vishal Garg said that it would issue the tokens and then would be “figuring out how do we get this in the hands of consumers,” but did not say when the tokens would be launched.
Fortune reported that the retail-focused tokens would be named “Home Token,” citing a person familiar with the plans.
It comes as shares in the Nasdaq-listed Better (BETR) have struggled after hitting a peak of over $86 in late October.
Its stock has since sunk, ending trading on Monday at around $27, down nearly 17% so far this year.
Better ended trading on Monday down nearly 6%, adding to its losses since October. Source: Google Finance
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Garg explained to Fortune that its push into crypto was driven by the promise of lower fees and operating costs, and that there are “so many different layers of intermediation that we’re going to be able to take out.”
“If we’re able to finance at a much lower cost than anyone else in the mortgage market, we’re going to be able to offer consumers a much cheaper mortgage than anybody else in the market,” he added.
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