Bitwise partners with Morpho to provide an institutional-grade DeFi product vault
Digital asset management company Bitwise has partnered with decentralized finance (DeFi) lending protocol Morpho to launch a security-free on-chain warehouse aimed at producing products.
The move was announced by X on Monday, with Bitwise saying that the first vault will focus on investing in leveraged loan pools with an annual percentage yield of 6 percent.
“Finance is moving on-chain. Vault is a key part of that, giving investors a clear way to access digital products on their assets,” said Bitwise.
Bitwise's onchain caults through Morpho
Bitwise deploys multiple strategies in Morpho's Vault, the firm's “curation, strategy and risk management” led by Jonathan Mann, Bitwise's portfolio manager and head of multi-strategy solutions.
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The move comes a month after Bitwise predicted that on-chain treasuries, which it has dubbed “ETFs 2.0,” will double assets under management by 2026.
In the report, Bitwise likens vaults to “onchain investment funds,” explaining that users can simply deposit assets into a vault, with a third party managing the assets and using them to produce a product in decentralized finance.
“We believe that in 2026 a wave of high-quality custodians will enter the market, attracting billions of dollars of capital to the funds they manage. The space will grow rapidly and attract the attention of major financial publications. One of them – Bloomberg, The Wall Street Journal or the Financial Times – will name funds ‘ETFs 2.0′” He said.
A key feature of OnChain Vault is that users can deposit or withdraw their funds at any time, without the funds being locked in specific staking protocols. On the controller side, you'll see returns under “Management and/or Performance Fees.”
“Vaults share the same goal as traditional currencies – to provide users with a simpler way to deploy capital efficiently and effectively, but with automation and programmable code instead of intermediaries,” Morpho said on its website.
In a post on X the same day, the Morpho team said the development with Bitwise “is an important step forward for Morpho's infrastructure positioning.”
Paul Frambot, co-founder and CEO of Morpho, said at X: “I'm excited to see the Vault Curation model continue to scale, which is leveraged by some of the world's largest financial institutions.
Bitwise's announcement wasn't the only key development for Morpho this week, after it announced the integration of its Centora-based repositories with Kraken's DeFi monetization program.
Morpho sees a strong finish through 2025.
Morpho is the seventh largest DeFi platform with $6.7 billion in total value locked (TVL), according to data from DeFillama.
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Last year, the platform launched with $3.2 billion in TVL by 2025, and at the end of January, it partnered with Coinbase to launch Bitcoin-backed loans, rising to $4 billion.
Morpho TVL dropped to $2.5 billion in April in an attempt to cash in on the stalled protocol before any money was lost.
From there, however, adoption of the platform exploded, rising to $8.5 billion in November, following partnerships with Crypto.com and Societe Generale's digital asset subsidiary SG-FORGE in September and October.
While it has managed to improve its rankings over the past 12 months, it still has a long way to go to catch rival lending platform and industry leader Ave, which owns the more than $34 billion TVLL.
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