Bitwise Launches On-Chain Vault in Partnership with Morpho

Bitwise Asset Management, known for its cryptocurrency ETFs, announced the launch of its first on-chain vault in partnership with the DeFi platform Morpho. This vault aims to earn up to 6% annual yield on the stablecoin USDC by placing funds in overcollateralized lending markets. This initiative makes DeFi more accessible to investors seeking on-chain yields without the need to manage risks themselves.

According to the details, the vault functions as a portfolio of lending positions, where smart contracts automatically allocate capital within predefined risks. User funds remain non-custodial and are stored directly on the blockchain, while Bitwise is responsible for designing the strategy and real-time risk monitoring. Jonathan Menn, head of multi-strategy solutions at Bitwise, noted that in the future, support for other stablecoins and crypto assets is planned, as well as broader DeFi strategies such as tokenization of real-world assets (RWA), providing liquidity on decentralized exchanges, and yield farming.

Morpho, as a decentralized lending protocol, provides the infrastructure for vaults, allowing curators like Bitwise to create unique risk profiles and strategies. Co-founder and CEO of Morpho, Paul Frambot, emphasized that unlike exchanges like Coinbase, which simply distribute vaults, Bitwise directly curates non-custodial strategies. Bitwise calls on-chain vaults "ETF 2.0" and predicts a doubling of their AUM (assets under management) this year, already reaching $8.8 billion as of 2025.

Advantages include on-chain transparency, automation, and institutional-level risk management. However, as with any DeFi, there are risks: smart contract vulnerabilities, potential losses due to rapid collateral value drops, lack of insurance (unlike traditional finance), and loss distribution among lenders in one vault.

This news is already actively discussed in the community: on X, users like @coinbureau note that this is a step toward mass adoption of DeFi among traditional investors, with potential for expansion into RWA and DEX liquidity.

Other posts, for example from @Yogita_Khatri5, highlight Bitwise's transition to on-chain assets. Overall, analysts believe that 2026 will be the year of growth for on-chain vaults, transforming them from niche DeFi strategies into tools for a broad audience.