Bitwise Shakes Up DeFi: Non-Custodial Onchain Yield Vaults Hit Morpho, Eyeing 6% APY
Yield hunters just got a new weapon. Bitwise—the heavyweight asset manager known for its crypto ETFs—is diving headfirst into the DeFi yield game. Its latest play? Non-custodial onchain vaults built on Morpho's lending infrastructure, promising a targeted 6% annual return. This isn't your grandma's savings account.
The Onchain Custody Conundrum
Forget trusting a central exchange with your keys. Bitwise's vaults let users keep full control of their assets while the protocol automatically farms yield. It's a direct shot at the 'not your keys, not your crypto' crowd, offering institutional-grade strategy with self-custody execution. Morpho's peer-to-peer lending pools provide the engine, aiming for efficiency that outpaces bloated traditional finance intermediaries.
Why 6% Matters Now
In a world of anemic bond yields and inflationary cash, a 6% target in digital assets turns heads. It's a figure that screams 'alpha' to traditional portfolios still clinging to 2% returns. Bitwise is betting that sophisticated, automated yield strategies—executed onchain—are the next frontier for capital allocation. No loan officers, no bank branches—just code and collateral.
The Bigger Picture: DeFi's Institutional On-Ramp
This move isn't just about a product launch. It's a signal. Major regulated players like Bitwise building on DeFi primitives like Morpho legitimizes the entire ecosystem. It bridges the gap between Wall Street risk appetites and blockchain-native yield mechanics. The vault acts as a managed wrapper, handling the complexity so users just see the output—a sleek interface over a complex engine.
One cynical finance jab? It's almost ironic—the same institutions that once dismissed crypto are now racing to repackage its native yield as their own innovative product. The future of finance is being built, and sometimes it just looks like the old middlemen finding new protocols to intermediate.
Bottom line: The race for onchain yield is heating up. With Bitwise entering the fray, the message is clear—serious yield is moving onchain, and the old guard wants a piece. Whether this vault hits its target or not, it's another nail in the coffin for the idea that high finance and decentralized protocols can't coexist. They already are.
First Strategy Focused on Stablecoin Yield
Bitwise said its initial vault strategy on Morpho is designed to generate yield by investing in overcollateralized lending pools. The strategy currently targets an APY of around 6%, providing investors exposure to onchain fixed-income-style returns through transparent lending markets.
Vaults function similarly to a portfolio of lending positions, allocating capital across programmable strategies to earn digital yield. Bitwise said its approach will combine onchain infrastructure with professional oversight to help investors participate in DeFi markets.
Strategy and Risk Oversight Led by Jonathan Man
The vault curation and risk management will be led by Jonathan Man, CFA, Bitwise Portfolio Manager and Head of Multi-Strategy Solutions and DeFi Strategies.
“Decentralized finance offers compelling yield opportunities, but the complexity of managing onchain risk has kept many investors on the sidelines,” Man said.
“That’s why we’re so excited for Bitwise to enter vault curation. Bitwise provides value-add by layering professional guidance and risk management experience onto these non-custodial tools,” adds Man.
Bitwise said the strategy will draw on the expertise of its 140-person team of investment and technology professionals and the firm’s more than eight-year track record as a crypto specialist.
Morpho Highlights Institutional Demand for Onchain Infrastructure
Morpho provides programmable and non-custodial infrastructure for onchain lending and borrowing, with vaults operated through smart contracts that invest funds programmatically on behalf of users.
“Bitwise joining Morpho as a vault curator highlights growing institutional demand for allocating capital onchain through noncustodial infrastructure,” said Paul Frambot, co-founder and CEO of Morpho.
He added that Morpho Vaults are designed for institutional use, allowing professionally defined risk parameters to be expressed directly onchain.
“As major institutions like Bitwise recognise the value in diversified fixed-income strategies in digital assets, vaults are emerging as a Core building block of onchain finance strategies,” Frambot said.
Vaults Positioned as Building Blocks of Onchain Finance
The launch comes as crypto firms increasingly frame vault strategies as a key component of the broader shift toward onchain financial markets.
Bitwise said it believes vaults offer investors a transparent way to earn digital yield while maintaining non-custodial control of assets. The company indicated more strategies are expected to follow as institutional participation in DeFi continues to expand.
