Bitwise Launches First On-Chain DeFi Vault Using Morpho for Stablecoin Yield

TheNewsCryptoОпубліковано о 2026-01-27Востаннє оновлено о 2026-01-27

Анотація

Bitwise, a prominent crypto investment firm, has launched its first on-chain DeFi vault, which went live on January 26. Built on the Morpho protocol, the non-custodial vault enables users to earn yield directly on-chain. Bitwise acts as the strategy manager, overseeing fund allocation with full on-chain transparency. The vault currently accepts USDC deposits, which are lent to overcollateralized borrowers via Morpho, targeting annual returns of around 6% depending on market conditions. Emphasizing risk control, the strategy includes only overcollateralized lending—no leverage or speculative trading—with all positions visible on-chain. This move signals a significant shift in institutional engagement with DeFi, offering investors transparency and positioning Bitwise at the forefront of institutional-grade on-chain tools. The firm views this as an initial step in a broader plan to develop more on-chain strategies, leveraging Morpho’s customizable and standardized smart contracts for professional DeFi management.

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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QWhat is the name of the first on-chain DeFi vault launched by Bitwise and which protocol does it use?

ABitwise's first on-chain DeFi vault uses the Morpho protocol.

QWhat is the key cryptocurrency asset used in the Bitwise vault and what is its target annual return?

AThe vault currently uses USDC and targets returns of around 6% per year, depending on market conditions.

QAccording to the article, what are the three key risk control features of the Bitwise vault?

AThe vault's key risk control features include overcollateralized lending only, no leverage or speculative trading, and full on-chain visibility of all positions.

QWhy did Bitwise choose to build its vault on the Morpho protocol?

ABitwise chose Morpho because it allows professional firms to design custom lending strategies using standardized smart contracts, enabling them to manage DeFi products while staying fully on-chain.

QWhat does Bitwise's launch of this vault signify for large asset managers, according to the article?

AThe launch shows a major shift in how large asset managers view DeFi, giving investors transparent positions and positioning Bitwise early in the development of institutional-grade DeFi tools.

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