Bitwise Asset Management, a prominent crypto asset manager with over $15 billion in client assets, has announced the launch of its new onchain investor solution: non-custodial vault curation, powered by Morpho. This move marks Bitwise's first direct participation in DeFi vault curation, positioning the firm as an active strategy manager.

The new vault offering leverages Morpho, an onchain lending network providing programmable and non-custodial infrastructure for onchain lending and borrowing. Bitwise's initial vault strategy with Morpho will focus on generating an annual percentage yield (APY) of up to 6% on stablecoins, with plans to incorporate additional strategies in the future. The underlying strategy and real-time risk management are spearheaded by Jonathan Man, CFA, Bitwise Portfolio Manager and Head of Multi-Strategy Solutions and DeFi Strategies, utilizing the expertise of Bitwise's 140-person team of technology and investment professionals.

Vaults, in this context, are onchain lending strategies that operate similarly to a portfolio of lending positions. Bitwise's strategy utilizes Morpho's open, modular architecture to implement scalable, custom onchain strategies with systematic risk management. The vaults are non-custodial, meaning users retain control of their assets while Bitwise defines allocation parameters and risk controls. By acting as a curator rather than a custodian, Bitwise avoids taking direct control of client assets.

Bitwise's entrance into vault curation aims to address the complexities of managing onchain risk that have kept many investors out of decentralized finance (DeFi). Morpho's vaults employ a set of smart contracts to programmatically invest funds on behalf of its clients with the goal of generating digital yield. The strategy involves deploying USDC in over-collateralized lending markets.

Paul Frambot, Co-founder and CEO of Morpho, stated that Bitwise joining Morpho as a vault curator highlights the increasing institutional demand for allocating capital onchain through noncustodial infrastructure. He also noted that Morpho Vaults are built for institutional use, enabling professionally defined risk parameters.

The launch reflects growing institutional interest in non-custodial, onchain yield structures. Bitwise's initiative serves as a test case for whether professional curation can make decentralized lending more accessible to sophisticated investors. Bitwise is also considering the inclusion of more stablecoins and crypto assets in its offerings. Bitwise plans to explore diverse DeFi strategies, such as real-world asset tokenization and liquidity provision for decentralized exchanges.

Despite the involvement of an established asset manager, the strategy remains exposed to protocol-level and market risks inherent to decentralized lending. Yields are variable and depend on borrowing demand, collateral quality, and broader market conditions, while smart-contract risk and liquidation dynamics remain structural features of onchain lending markets.