Framework Ventures Partners with Better on $500M Sky Protocol Integration
The crypto venture capital firm has acquired a 10% stake in Better for $45 million and plans to assist the mortgage company in launching a cryptocurrency token through Sky protocol.
Framework Ventures, a cryptocurrency-focused venture capital firm, has entered into a strategic partnership with mortgage services provider Better to facilitate the company's $500 million initiative to integrate with Sky, the decentralized finance protocol previously known as MakerDAO.
In an announcement made on Monday, Better revealed that Framework would assist the company in providing $500 million worth of credit to the stablecoin ecosystem operated by Sky, which involves the creation of tokens backed by mortgages designed to produce yield.
Vance Spencer, co-founder of Framework Ventures, stated that real-world assets represent "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."
This strategic move is part of a growing trend of tokenization attracting interest from traditional financial institutions, with major players like BlackRock exploring tokenization opportunities for money market funds.
Tokens only for accredited investors, but will expand
According to a Monday report from Fortune, Framework has also entered into an agreement to purchase 10% of Better's equity, valued at approximately $45 million, with the proposed tokens set to be initially available exclusively to accredited investors.
Vishal Garg, founder and CEO of Better, stated that the company would issue these tokens and subsequently work on "figuring out how do we get this in the hands of consumers," though he did not provide a specific timeline for the token launch.
According to Fortune's reporting, which cited an individual with knowledge of the plans, the consumer-oriented tokens are expected to be called "Home Token."
The announcement arrives as Better's shares on the Nasdaq (BETR) have experienced significant difficulties following their peak of more than $86 in late October.
The company's stock has experienced a dramatic decline since then, closing Monday's trading session at approximately $27, reflecting a decrease of nearly 17% year-to-date.
In his conversation with Fortune, Garg elaborated that the company's venture into cryptocurrency markets is motivated by the potential for reduced fees and operational expenses, noting 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.