TLDR
- Bitwise has launched its first onchain vault strategy through the Morpho lending protocol.
- The vault targets a yield of up to 6 percent on the USDC stablecoin.
- Bitwise manages the strategy and risk while user funds stay non-custodial and onchain.
- The firm plans to support other stablecoins and crypto assets in future vaults.
- Bitwise aims to simplify DeFi investing with institutional-grade risk oversight.
Bitwise has launched its first onchain vault strategy through Morpho, offering a potential 6% yield on USDC; the firm aims to simplify decentralized finance exposure, as funds remain non-custodial and risk-managed through smart contracts.
Bitwise Launches Vault Strategy Through Morpho
Bitwise Asset Management introduced an onchain vault using the decentralized protocol Morpho. The strategy targets yields of up to 6% on USDC. This marks the firm’s entry into the decentralized finance (DeFi) sector.
Jonathan Man, Bitwise’s head of multi-strategy solutions, confirmed that the vault uses over-collateralized lending markets. He said the vault is designed to simplify investor access to DeFi yields. Man explained that Bitwise manages strategy design and real-time risk oversight while user funds remain onchain.
The vault uses smart contracts to allocate funds within predefined risk boundaries. It operates without custodianship, ensuring control stays with users. Bitwise described these vaults as “ETFs 2.0,” offering institutional-grade oversight for retail DeFi exposure.
Bitwise stated it could support other stablecoins and crypto assets in future vaults. Strategies may also include real-world asset tokenization and decentralized liquidity provision. Yield farming could also be part of upcoming strategies.
The company said these curated vaults make DeFi more accessible for mainstream investors. Bitwise intends to manage risk while removing the need for users to handle complex onchain tools. The goal is to offer yield with less technical friction.
Man said, “DeFi offers yield opportunities, but managing risk has kept many investors out.” He emphasized Bitwise’s role in curating safe exposure. The firm aims to attract users looking for automated yet secure onchain returns.
Vault Growth and Institutional Involvement
Vault assets grew from under $100 million in 2024 to $8.8 billion by 2025. Bitwise said the October 2025 market volatility exposed weak risk practices. That event caused outflows but also reset quality standards across vault platforms.
Bitwise expects vault assets to double within a year as investor confidence returns. It believes better risk management will attract new capital. The firm sees vaults as a long-term structure for onchain yield strategies.
Morpho CEO Paul Frambot explained that Bitwise acts as a curator. He noted that Coinbase offers vaults but does not manage strategies. Frambot added, “Bitwise will curate non-custodial vaults, which others can distribute for onchain yield access.”
DeFi Platforms Increase Vault-Based Products
Kraken announced a “DeFi Earn” product built using Veda’s vault infrastructure. This new offering targets yields up to 8%. It highlights growing interest from exchanges in automated DeFi yield.
Coinbase has supported Morpho vaults for over a year, focusing on user interface and distribution. However, it does not curate the strategies directly. Vault curation is handled by third parties like Bitwise.
These developments show exchanges prefer outsourcing vault design. It allows them to offer yield without internal strategy management. Frambot said vault curators handle risk and design while platforms focus on user experience.
Vaults offer transparency and automation but carry smart contract and market risks. If collateral prices fall quickly, vault users may face losses. Unlike traditional finance, these products are not insured.
Funds in vaults are non-custodial, and losses can be shared across lenders. Vault users need to understand these structural risks. Bitwise said its strategy includes real-time risk management to reduce exposure.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
