Bitwise, a well-known crypto investment firm, officially enters the DeFi by launching its first on-chain vault, and the product went live on January 26. The product runs on the Morpho protocol, which allows users to earn yield directly on the blockchain. The Vault is non-custodial, and Bitwise acts as a strategy manager that decides how the funds are allocated, and everything happens fully on-chain.
Workflow of Vault
The Vault currently uses USDC, and investors are supposed to deposit USDC into the Vault, and these funds are then lent to the borrowers through Morpho, and the borrowers must provide more collateral than they borrow. The Vault currently targets returns of around 6% per year, depending on the market conditions.
Bitwise states that the vault is primarily designed to focus on risk control. Jonathan Man, who leads Bitwise’s multi-strategy investment group, is handling the risk oversight and strategy decision. The vault’s key features include overcollateralized lending only, no leverage or speculative trading, and full on-chain visibility of all positions.
This launch shows a major shift in how large asset managers view DeFi. For Bitwise, it gives investors a transparent position and positions Bitwise early in institutional-grade DeFi tools. The firm described this vault as an early step in a broader plan to build more on-chain investment strategies in the future.
Why Bitwise Choose Morpho
Morpho allows professional firms to design custom lending and use standardized smart contracts. This lets companies like Bitwise manage DeFi products while staying on-chain. Bitwise said it views Morpho-based vaults as an important part of the future of on-chain finance.
Bitwise says that this is the first step, and no performance history has been released yet. The company stated that this vault is part of a longer-term plan to move deeper into decentralized finance, and more on-chain strategies may come later.
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