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- Interview: Behind Bitwise's Move Into Onchain Vaults — with Bitwise and Morpho
Interview: Behind Bitwise's Move Into Onchain Vaults — with Bitwise and Morpho
In this interview, Bitwise’s Head of Multi-Strategy Solutions & DeFi Strategies Jonathan Man and Morpho CEO Paul Frambot discuss why Bitwise is launching its first non-custodial onchain vault, how vaults are emerging as a core primitive for institutional asset management, and what is still required for vaults to reach true institutional scale.
Fiodar Yuzhyk & Maximilian Vargas
January 29, 2026
Onchain expansion: On Monday, $15 billion digital asset manager Bitwise announced the launch of its first non-custodial onchain vault, built on the infrastructure of lending protocol Morpho. This marks the first time a traditional asset manager is directly entering onchain asset management.
Growing trend: Vaults have emerged as one of the fastest-growing primitives in the onchain economy. In essence, they function like traditional funds, offering yield through professionally managed strategies. The key difference is that they are non-custodial, meaning the asset manager never holds user assets, which remain in smart contracts at all times.
Powered by Morpho: Much of the infrastructure behind today’s largest vaults is provided by Paris-based Morpho, the second-largest lending platform after Aave, with more than $6.8 billion in total value locked.
Successful case studies: Vaults are already being used by major institutions to extend their product offerings.
Coinbase, for example, relies on vault-based structures for its lending product, enabling users to post BTC and ETH as collateral for USDC loans. Since launching early last year, the product has attracted nearly $2 billion in deposits.
Société Générale’s blockchain subsidiary, SG-FORGE, also uses onchain vaults to support distribution and liquidity for its euro- and dollar-denominated stablecoins.
Why it matters: Bitwise’s move differs from these approaches. While Coinbase and SG-FORGE outsource vault management to third-party risk curators such as Steakhouse Financial, Bitwise plans to manage strategy and risk in-house. In doing so, it becomes the first traditional asset manager to directly enter onchain asset management.
Interview: We spoke with Jonathan Man, Bitwise’s Head of Multi-Strategy Solutions & DeFi Strategies, who will oversee the vault’s strategy, and with Paul Frambot, co-founder and CEO of Morpho, about why Bitwise is expanding into vaults, how it plans to build distribution over time, and what is still missing for vaults to reach institutional scale.
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On why Bitwise decided to enter the vault curation market:
Man (Bitwise): “Vaults are still a very nascent category, but they’ve already become a meaningful part of onchain asset management. Just a few years ago, they effectively had no assets. Over the past year, they grew to nearly $7 billion in AUM, and alongside that growth we began seeing consistent inbound interest from clients asking for a Bitwise-managed vault solution.
Given our experience in risk management and strategy structuring, we believe we’re well positioned to step in directly and put our name behind a product in this category. And to be clear: This is not an experiment. For Bitwise, growing in this segment is a priority.”
On the initial design of Bitwise’s vault and future design space:
Man (Bitwise): “We think of vaults as a flexible wrapper, similar to ETFs in traditional markets. They’re not built around a single strategy. Instead, they’re designed to support different strategies over time as user needs and market conditions change.
With that framing, we were very intentional about where to start. The vault launches with overcollateralized lending, targeting 6% APY. We see this strategy as a simple and well-understood entry point for onchain asset management and a solid foundation for managing risk.
From there, the strategy set can expand in a measured way, including into strategies built around tokenized real-world assets.”
On how Bitwise aims to drive AUM for its vaults:
Man (Bitwise): “We don’t think there’s a single path to distribution, so we’re approaching adoption through multiple channels. The vault is currently private, with plans to make it publicly available over time, while also working directly with clients that require more bespoke implementations."
Over time, we also expect distribution to increasingly flow through partners that are already touching stablecoins, particularly fintechs and platforms that sit closer to end users. In many cases, vaults will sit underneath the surface of a product rather than being something users explicitly seek out, with yield becoming a built-in feature of how stablecoin balances are managed.”
On the growth outlook for vaults and the key trends shaping the market in 2026:
Man (Bitwise): “We think the vault market is still in its early stages. In our Bitwise 2026 predictions, we mention our belief that vault AUM will double in 2026 as stablecoins continue to grow and more capital looks for simple, onchain ways to earn yield.”
Frambot (Morpho): “The number of conversations we’re having with traditional players right now is insane. They already see stablecoins becoming the checking account for their users. But users don’t just want to hold stablecoins, they want to earn yield on them.
That’s why I expect every institution with a crypto arm to move their user balances into vaults within the next 12 months. But adoption doesn’t stop there. It starts to spread outward, with distributors and institutions that wouldn’t normally think of themselves as crypto companies beginning to use vaults as well.”
On what’s missing for vaults to reach institutional scale:
Frambot (Morpho): “Today, most onchain vaults are built around variable-rate, overcollateralized lending. That works well for crypto-native use cases, but it’s not enough for institutions that need predictable cash flows. Fixed-rate and fixed-term primitives are still missing — a gap Morpho V2 is designed to address — and those are essential if vaults are going to support larger, more traditional balance sheets.
Beyond that, institutions need stronger trust and compliance signals onchain. Things like identity, reporting, and a clearer picture of who is on the other side of a transaction matter once you move beyond pure onchain collateral. Without those signals, it’s hard to underwrite risk at scale.
Once those pieces are in place, vaults can start to support more complex forms of credit, including undercollateralized lending. That’s where vaults evolve from simple crypto lending tools into foundational infrastructure for more advanced use cases.”
On the evolving role of traditional asset managers in an onchain vault ecosystem:
Man (Bitwise): “As vaults become more institutional, the role of the vault curator becomes more important. Protocols like Morpho are intentionally designed not to be asset managers themselves. Instead, they provide the infrastructure, while risk management and strategy design sit with curators.
That’s where traditional asset management expertise starts to matter. Managing risk, understanding credit, and structuring portfolios are core skills in traditional finance, and those skills translate directly as onchain markets mature. At the same time, this isn’t something that can be done without deep familiarity with DeFi. Crypto markets move quickly, and the failure modes are different.”
Frambot (Morpho): “From our side, the goal is to enable that shift. We want competent underwriters and asset managers to use the network to express their views and manage risk onchain, rather than having those decisions hardcoded at the protocol level. Over time, that’s what allows vaults to support a wider range of use cases beyond simple lending.”
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