Onchain push: On Wednesday, Europe’s largest publicly listed digital asset manager CoinShares announced plans to launch its first ever DeFi-powered yield product, marking the firm's expansion into the growing onchain asset management space. The move comes alongside a strategic partnership with French startup Kiln, whose Railnet solution will serve as the underlying infrastructure for the new offering.
How it works: The product offers access to a diversified strategy that allocates capital across multiple yield sources, including:
DeFi lending protocols (Aave, Morpho, Compound)
Tokenized funds and ETFs (Ondo, WisdomTree, Securitize)
Institutional credit (Maple Finance)
Market-neutral strategies (Ethena)
Illustrative example by Blockstories; not an exact representation of CoinShares’ architecture
Railnet’s open architecture brings these sources together within a single onchain vault, while CoinShares acts as the regulated portfolio manager overseeing capital allocation. The product will initially launch as a B2B2C offering for exchanges, custodians, and fintech platforms.
Growing momentum: The announcement represents the second major digital asset manager launching an onchain investment product in recent months. In January, U.S. firm Bitwise launched its first onchain vault product built on top of the lending protocol Morpho.
Why it matters: Onchain asset management is a rapidly expanding category within crypto. Since early 2025, AUM across onchain yield strategies more than doubled to over $35 billion. This growth has been driven primarily by crypto-native capital seeking yield, with the space so far dominated by specialized crypto-native risk curators such as Steakhouse Financial and Gauntlet managing the underlying strategies.
Tailwinds ahead: But as digital assets continue to institutionalize and regulatory clarity around DeFi integration takes shape, onchain strategies are growing increasingly attractive to non-crypto-native and institutional capital, with projections placing AUM between $41 and $85 billion in 2026.
Strategic importance: “We see onchain asset management as a key third pillar of CoinShares, alongside our ETPs and active strategies. In the near term, we expect it to remain smaller than our roughly $6 billion ETP business. Over the long term, however, the opportunity is larger: the onchain risk curator segment already accounts for around $7 billion in total value locked, and we believe that, with strong execution, we can capture a meaningful share of this growing market,” told us Jérôme Castille, Managing Director at CoinShares.
Interview: In our conversation, Castille also explained why CoinShares chose Railnet over Morpho’s vault model used by Bitwise, and highlighted the types of onchain investment products likely to attract institutional capital next.
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Who specifically is knocking on your door for this?
“The demand today is primarily coming from exchanges, custodians, and fintech platforms that hold large pools of client stablecoins. These platforms are looking to either generate returns on this idle capital or offer yield to their users as a way to retain deposits.
This becomes especially important during periods of lower market activity. When trading volumes decline, these platforms risk losing clients who move their funds into traditional products like treasuries via brokerage accounts. As a result, platforms are increasingly competing to offer more attractive USDC yield programs.
That competitive pressure is driving demand for differentiated, professionally managed yield strategies.”
Bitwise decided to become a vault curator on Morpho. Why did you choose Railnet instead?
“If you're building a yield product on top of individual lending protocols, you're largely constrained to allocating capital across whatever markets that platform supports. Today, they're mostly tied to crypto assets and yields. The challenge is that those yields tend to move together. Our analysis shows that more than 80% of yields across major DeFi lending protocols are closely correlated.
Railnet lets us go further. It acts as an open yield orchestration layer, giving us full control over asset selection. That means allocations can span both DeFi lending and real-world assets such as tokenized MMFs, equities, commodities and private credit.
The key advantage is diversification. DeFi yields and traditional assets such as fixed income are driven by different dynamics, so combining both within a single portfolio can create a more balanced and sustainable yield profile.
This kind of multi-asset construction is standard in traditional finance, but onchain, it has been nearly impossible to execute without infrastructure like Railnet.
Railnet also gives us a clearer view of risk across the portfolio, which is something we have not really seen elsewhere. We can monitor asset and protocol exposure, and better understand liquidity conditions and smart contract risk in one place, which makes allocation decisions more grounded.
But infrastructure is only part of the answer. Regulation matters just as much. And our authorizations under AIFMD, MiFID, and MiCA allow us to allocate across traditional securities, tokenized assets, and crypto markets within a single compliant framework. That combination is what makes the product viable, especially for institutional allocators.”
Do you expect this kind of product to also appeal to traditional institutional investors in the future?
“Absolutely. Institutional investors are already showing interest, but their adoption cycles tend to be longer.
That is why all our strategies include an allocation to tokenized funds and real-world assets, complementing onchain lending exposures and anchoring portfolios in yield sources that are familiar to traditional investors.
These initial allocations give institutions a direct experience of DeFi's main structural advantage: continuous liquidity. Because part of the portfolio operates in DeFi lending markets, the strategy can access liquidity 24/7, unlike traditional fixed income products that only trade during market hours.
As institutions observe how these portfolios behave across several cycles, comfort typically grows. Over time, we expect institutions to begin requesting more exposure to onchain-native strategies.
That pattern is common whenever a new asset class emerges. Hedge funds and private equity entered institutional portfolios decades ago as small experimental allocations before gradually becoming standard components of diversified portfolios.”
What does the long-term product roadmap look like?
“At launch, we are rolling out four strategies graduated by risk:
a conservative low-risk strategy,
an investment-grade diversified flagship,
a DeFi-only strategy for platforms that do not want real-world asset exposure,
and a high-yield strategy that is more aggressive and less liquid.
Once these strategies gain adoption, there is a lot more we can build. To give just one example of what the infrastructure makes possible: a technology vault holding tokenized Tesla, Meta, and Google shares via Ondo, a Nasdaq ETF, and assets like ETH and SOL, all rebalanced programmatically within a single structure. At that point, you are no longer looking at a yield product. You are looking at a new type of tokenized index strategy, what some are already calling ETFs 2.0.”
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KEY TAKEAWAYS
Onchain asset management is attracting traditional players as growth accelerates. With AUM in onchain yield strategies projected to reach between $41.6 billion and $85 billion in 2026, firms like CoinShares are entering the space to capture this expanding opportunity.
Demand is driven by platforms sitting on idle stablecoin liquidity. Exchanges, custodians, and fintechs are seeking to generate yield and retain users, especially during periods of low trading activity when capital rotates away from crypto into traditional instruments.
Diversification beyond crypto-native yield is becoming essential. With over 80% of DeFi lending yields moving in tandem, combining them with tokenized RWAs such as treasuries, ETFs, and private credit creates a more balanced return profile.
New infrastructure is enabling new product categories. Unlike single-protocol vault models, Railnet allows CoinShares to allocate across DeFi lending, tokenized funds, private credit, and market-neutral strategies within a single portfolio, pointing toward "ETFs 2.0".
Institutional adoption will start with familiar assets and expand over time. Attracting institutional capital requires blending tokenized versions of familiar instruments such as T-bills with DeFi lending to offer continuous liquidity. As institutions gain experience and observe these benefits in practice, allocations are likely to move deeper into DeFi.
