Digital asset manager Bitwise has partnered with decentralized finance lending protocol Morpho to launch non-custodial, onchain vaults designed to generate yield.
The initiative was announced on X on Monday, with Bitwise saying its first vault will target a 6% annual percentage yield by allocating capital to overcollateralized lending pools.
“Finance is moving onchain, and vaults are a key part of that shift, offering investors a transparent way to earn digital yield on their assets,” Bitwise said.
Bitwise’s onchain vaults via Morpho
Bitwise plans to deploy multiple strategies across its Morpho-based vaults, with curation, strategy design, and risk management overseen by Jonathan Man, Bitwise’s portfolio manager and head of multi-strategy solutions.
Onchain vaults to double AUM in 2026: Bitwise
The launch follows Bitwise’s forecast last month that onchain vaults—dubbed “ETFs 2.0” by the firm—will double their assets under management in 2026.
In its report, Bitwise described vaults as “onchain investment funds,” allowing users to deposit assets while third-party curators manage capital and deploy it across decentralized finance strategies to generate yield.
“We believe a wave of high-quality curators will enter the market in 2026, drawing billions of dollars into the vaults they manage,” Bitwise said. “The space will grow so fast it will catch the attention of major financial publications. One of them—Bloomberg, The Wall Street Journal, or the Financial Times—will label vaults ‘ETFs 2.0.’”
A key feature of onchain vaults is flexibility: users can deposit or withdraw funds at any time, with assets not locked as they are in certain staking protocols. Curators, meanwhile, earn returns through management and/or performance fees.
“Vaults share a similar goal to traditional funds—providing users with a simpler and more efficient way to deploy capital—but rely on automated, programmable code rather than intermediaries,” Morpho said on its website.
Posting on X the same day, the Morpho team called its partnership with Bitwise “an important step for Morpho’s infrastructure positioning.”
“Excited to see the vault curation model continue to scale, with the largest financial institutions in the world leaning in,” Morpho co-founder and CEO Paul Frambot said on X.
The Bitwise collaboration was not Morpho’s only major development this week. The protocol also announced that curated vaults from Sentora have been integrated into Kraken’s DeFi Earn program.
Morpho saw a strong end to 2025
Morpho is currently the seventh-largest DeFi protocol by total value locked (TVL), holding $6.7 billion, according to DeFiLlama data.
The platform began 2025 with roughly $3.2 billion in TVL, climbing to about $4 billion by the end of January following a partnership with Coinbase to launch Bitcoin-backed loans.
TVL later fell to around $2.5 billion by April amid an attempted exploit that was ultimately stopped before any funds were lost. From there, adoption accelerated sharply, with TVL surging to as high as $8.5 billion in November after Morpho secured partnerships with Crypto.com and Société Générale’s digital asset subsidiary, SG-FORGE, in September and October.
Despite its rapid growth over the past year, Morpho remains well behind industry leader Aave, which currently holds more than $34 billion in total value locked.
