Better Home & Finance Holding Company is partnering up with Framework Ventures to drive stablecoin finance innovation. Through this partnership, $500 million of capital will be injected via integration into the Sky stablecoin ecosystem. By this partnership, Better will be a Star within Skys’ ecosystem, a small group of companies. That attracts capital on-chain to produce yield and automatically reinvests the earnings back into the network. Better is aiming to integrate via Obex, a Skycentric incubator run by Framework Ventures. Backed by a $2.5 billion commitment from Sky.
“We believe that Better’s integration into the Sky ecosystem could be a win for all parties: with this capital injection, we think Better will be able to rapidly scale origination and potentially lower mortgage rates for consumers in the long term. At the same time, bringing Better on as a Star would give the Sky stablecoin ecosystem a powerful and differentiated new source of yield,” said Vance Spencer, Co-Founder of Framework Ventures. “We view real-world assets as 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, comprising over $12 trillion in the United States alone. We were impressed by Better’s Tinman AI platform and its capability to originate mortgage and home equity assets, along with the company’s broader track record of originating more than $110 billion in loans.”
Stablecoin Funding Structure and Market Impact
The company will continue to be fully accountable for loan underwriting and origination. Meanwhile, the stablecoin mechanism serves as a different warehouse funding source. Such an arrangement is secured by the assets that are originated and reiterates a traditional warehouse. Models without leading to an escalation of the risk profile of Better’s balance sheet. This partnership indicates that DeFi and real-world assets are increasingly playing a major role in today’s financial markets.
“We believe tokenization has the potential to unlock efficiency and global liquidity in housing finance, one of the largest asset classes in the United States,” said Vishal Garg, Founder and CEO of Better. “We will be the first conforming mortgage originator to deploy tokenized capital to responsibly support mortgage assets at an institutional scale, and in doing so, lower funding costs for both Better and its Tinman AI platform partners, and their consumers by over 100 bps per year by integrating into the Sky Ecosystem. The full realization of our plan will translate into potentially sub 5% interest rates for Better’s customers when the rest of the industry is charging over 6%, in addition to significantly lowering the capital requirements for Better to finance its future growth plans as it scales from $500 mm per month to over $1 billion per month in originations in 2026. All this while providing token holders with yields well above the current Stablecoin yield or rewards with superior credit risk. We’re just getting started.”
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News Source: Businesswire.com
