Bankless · Monday, July 20, 2026
Bitcoin Dave introduces the concept of 'Bitcoin Collateralized Loan Obligations' (CLOs) as a potential 'pristine collateral' for on-chain repo markets. These instruments, created through systems like Morpho Midnight, would offer yield-bearing stablecoins backed by Bitcoin-backed loans, aiming to provide superior risk-adjusted yields compared to traditional finance and other on-chain options.
“And so now if we map that onto on-chain, on-chain will need to recreate a repo system.”
“That instrument, that form of collateral, in my opinion, is the single best and most pristine collateral that can be created on chain, period, bar none.”
“And that is the best risk-adjusted yield that's possible on chain, in my opinion, with the deepest possible market.”