Catenaa, Sunday, February 01, 2026- Bitwise Asset Management has launched its first onchain vault strategy through the Morpho decentralized lending protocol, marking the firm’s entry into decentralized finance products.
The initial vault seeks to generate yields of up to 6% on the USDC stablecoin by allocating capital to over collateralized lending markets on Morpho. Bitwise said the strategy is designed to give investors exposure to onchain yield without requiring them to manage complex risk settings directly.
Bitwise, known for its crypto exchange traded funds, said it will act as the vault curator, overseeing strategy design and ongoing risk management.
User funds remain non custodial and are held onchain, with smart contracts automatically allocating capital within predefined limits.
The firm said additional stablecoins and crypto assets may be added in the future, along with other DeFi strategies such as real world asset tokenization, decentralized exchange liquidity provision and yield focused products.
Onchain vaults operate similarly to portfolios of lending positions and have grown rapidly in recent years. Industry data cited by Bitwise shows vault assets rising from under $100 million in 2024 to more than $2 billion, before peaking near $9 billion in 2025. A sharp market pullback later that year exposed weak risk controls in some strategies and triggered losses and withdrawals, prompting closer scrutiny of vault management practices.
Interest in onchain yield products continues to expand. Kraken earlier announced a DeFi yield product built on vault infrastructure, while Coinbase has offered non custodial lending access through Morpho without directly managing vault strategies.
Despite growing adoption, DeFi lending carries risks, including smart contract failures and losses during rapid market moves. Onchain vaults are not insured, and losses can be shared among participants.
