Bitwise unveiled as vault manager of second-largest on-chain lender Morpho

Bitwise will join the growing risk curation industry in DeFi. The crypto asset manager will open independent vaults with a varied risk profile. 

Bitwise will become one of the vault curators on the Morpho DeFi lending app. The asset manager will join the leading vault curators with its own types of vaults. 

The vaults by Bitwise will be non-custodial and transparent, allowing investors to track yield and liquidity. Bitwise will start with a 6% APY strategy, building over-collateralized lending pools. 

Bitwise will appoint its own portfolio manager and head of multi-strategy solutions, Jonathan Man, CFA. The asset manager will dedicate a full team and possibly offer more carefully selected strategies among curated vaults. 

Bitwise expects asset managers to double in 2026

Bitwise expects an ongoing shift in on-chain finance, and itself plans to expand into several types of yield strategies. The company with over $15B in client assets joined the rapidly growing Morpho, one of the leading lending protocols. 

Morpho offers programmable non-custodial infrastructure for fully on-chain lending and borrowing, with automated issuance and redemption. Vaults work similar to a portfolio of lending positions, explained Bitwise. 

“Decentralized finance, or DeFi, offers compelling yield opportunities, but the complexity of managing onchain risk has kept many investors on the sidelines,” said Jonathan Man.

“Bitwise provides value-add by layering professional guidance and risk management experience onto these non-custodial tools,” he said.

Paul Frambot, co-founder and CEO of Morpho, said the platform is ready for institutional-grade usage, enabling professional risk parameters that are implemented directly on-chain. Bitwise has recognized the value of diversified fixed-income strategies and vaults are becoming a building block of on-chain finance, added Frambot.

Morpho increased its liquidity in January

Morpho climbed the ranks of lending protocols, now standing only behind Aave. The protocol carries $6.72B in total value locked, with growth resuming in January. 

The protocol achieved high weekly fees of $7.28M, and is ranked 27th among all fee-producing apps.

Before Bitwise, Gauntlet and Steakhouse dominated the biggest vaults. Steakhouse brings in over 55% of value locked in Morpho vaults. Bitwise will face strong competition in attracting attention to its own new strategies, competing with seven other curators. 

Morpho has been seeking a competitive advantage in partnerships with other crypto leaders. In the past year, the BTC-backed lending vaults powered by Coinbase Smart Wallet increased their value locked. 

Morpho BTC loans boosted TVL in the past year, driven by Coinbase’s wallet feature. | Source: Dune Analytics

In total, $1.92B in BTC was deposited through Coinbase’s lending feature, becoming one of the key sources of growth for Morpho. The loans are over-collateralized, and the BTC-backed vaults have lent out over $1B. 

The effect of Bitwise may be similar, as the organization has a high profile and may draw in funds to its new vaults. Morpho has also added vaults to Kraken DeFi Earn, adding another high-profile source of lending and borrowing activity.

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