DeFi protocols plugging into Spout tokens for safer collateral options

Spout tokens offer DeFi protocols a new form of low-volatility, yield-bearing collateral that is backed by real-world assets and updated via daily NAV oracles. Unlike stablecoins, which rely on trust assumptions or opaque reserves, Spout tokens are transparently backed by publicly traded ETFs held in licensed custody—making them ideal for lending markets, stablecoin vaults, and collateralized derivative platforms.

Protocols can use Spout assets to enhance their collateral mix, reduce systemic risk, and introduce yield-backed stability mechanisms. Combined with Spout’s FHE privacy layer, protocols can also protect user balances and position-level data while still leveraging public oracle feeds for valuation and liquidation logic. It’s a fundamentally safer way to scale on-chain credit.