On-Chain Asset Management Vaults and Channels
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No matter how many lies are spun, the truth will always shine through.
Asset management giants are showing increasing interest in on-chain vaults, and the mainstreaming of the DeFi dream seems to be becoming a reality.
It’s the best of times: BlackRock is buying $UNI tokens, Apollo has pledged to purchase hundreds of millions of dollars in $Morpho tokens, and Wall Street is collectively optimistic about DeFi’s future.
It’s the worst of times: BlackRock, Blackstone, and Blue Owl are facing a wave of concentrated redemptions, and Aave’s founder warns that Wall Street is using RWA as a liquidity exit channel.
Crisis always brings rare bargain prices. As asset prices are expected to inflate, new players are eager to jump in, paying little attention to the risks ahead.
Whatever you call it—DeFi, RWA, Vault—on-chain finance must accept the sweet coating and return fire. Only by breaking the old order can a new Eden be built.
You could even make this sweet apple tangible—the risk-free rate.
The Dream of the Risk-Free Rate
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Building a risk-free rate market based on stablecoins backed by on-chain assets is the only way to gain negotiating power with traditional asset management giants.
Let’s start with a central question: Why does DeFi still lack a risk-free rate?
Or, how can US Treasuries become the linear narrative for DeFi’s benchmark rate?
Image Caption: Stablecoin Chronicle
Image Source: @zuoyeweb3
Starting with DeFi Summer in 2020, repeated setbacks have built resilience:
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In 2018, DAI, backed by crypto assets, lacked scale effects; $USDS ultimately became a certificate for US Treasuries
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In 2021, $UST, a Ponzi-based stablecoin, didn’t survive the 2022 redemption crisis, and the story of rebuilding algorithmic stablecoins was abandoned
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In 2022, after The Merge, stETH faced a PoS crisis of faith, and Pendle ultimately abandoned LST for USDe
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In 2023/24, CDP stablecoins issued by DeFi giants like Aave and Curve weren’t recognized by other protocols
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In 2025, the market briefly believed Ethena’s $USDe was exceptional, hoping to restore on-chain glory. However, yield-generating stablecoins eventually split into deposit and yield activities, failing to challenge USDT/USDC’s dominance in their respective domains.
The facts are clear: It’s not that USDT is eating user profits, but that DeFi has chosen the scale effects of USDT/USDC.
Exchanging $300 billion in Treasury profits for the market’s trading foundation means DeFi and the crypto market aren’t losing out.
But what’s the cost?
The cost isn’t the supposed evil of Tether taking profits, or the selfishness of banks banning yield, as accused by Coinbase and Donald Trump Jr.
The real issue is that US Treasuries, as the risk-free rate, are transmitted to the chain via stablecoins, but Treasuries are assets of the US government, which acts without regard for on-chain sentiment.
This is the fundamental reason for the collapse of token economics: UNI relies on A16Z, A16Z relies on dollar financing, the dollar embodies US Treasuries, so UNI is just a fourth-order derivative of Treasuries. Why not buy Treasuries directly and cut out the middleman?
US Treasuries are the de facto DeFi benchmark, but DeFi can only passively accept this and can’t interact with them bidirectionally. This is the root of all happiness and pain.
Image Caption: Comparison of Annualized On-Chain Stablecoin Yields and US Treasuries
Image Source: @BarkerMoneyX
Efforts to save DeFi have never stopped. Despite the collapse of token economics and DAO governance structures, DeFi’s overall direction remains clear:
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Fixed-rate investment and financing, recognized risk grading systems, unsecured credit lending –> These will drive the next market phase, with some form of mass-market product;
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The expansion period for public chains, exchanges, and DeFi protocols has ended. The new form is Vaults (asset management vaults). While it’s not certain that Vaults will become the mass-market product, they mark the beginning of a new phase.
It’s important to note that public chains and exchanges are no longer the central channels for value capture, but this doesn’t mean they’re obsolete. Their asset price inflation phase is over, and only steady, linear growth remains.
This connects to the progressive relationship between UNI and US Treasuries. Aave and Morpho are more like asset management itself; their business lacks narrative space but remains essential to the industry.
The real star products will be Vaults based on public chains and DeFi protocols, designed for mass adoption, diversified with RWA assets, and capable of triggering asset price inflation mechanisms.
For mass adoption, Curators are teaming up with exchanges. Morpho uses Stakehouse to enter Coinbase, while Aave uses tools like Metamask and U cards to expand its retail user base.
For RWA assets, Curators partner with custodians like Galaxy, constantly shifting between crypto and real-world assets—for example, Grove purchasing Galaxy’s CLO bonds.
But what’s missing is a Vault that triggers asset price inflation. Even before this wave of large-scale on-chain asset management, BlackRock’s BUILD token was launched, and Circle’s USYC supports yield, but neither has replicated its own success.
The absence of a native token for Vaults isn’t crucial. Asset price inflation is a mechanism: stocks, real estate, bonds, tulips, graphics cards, and Mac Minis all have their own price cycles. Today’s Vaults are just yield black boxes, and they haven’t solved two key issues:
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Where does high yield actually come from?
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How is high risk actually managed?
Toward a New Financial System
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Channel forms are evolving; Vaults are not the endpoint.
The crypto industry evolves rapidly. Until this year, it was unimaginable that the global financial system would truly move on-chain, but today it’s an undeniable reality.
It’s too early to celebrate. RWA remains just a funding source, Vaults are still boring deposit games, and Curators have yet to show brand effects. White-label Vaults like Veda are highly similar to SaaS, with Curators earning only management fees.
This lacks imagination for price inflation. If traditional asset management, with $2 trillion in scale, endures cyclical hardship, it’s hard to imagine Vaults could withstand the same.
Image Caption: Capital Flow and Value Distribution
Image Source: @zuoyeweb3
On-chain asset management isn’t driven by fleeting sentiment. In some ways, it’s like banking’s IOE—there’s no going back to the paper era. Even Spark is starting to unify CEX/DEX position adjustments for margin calculation, and DeFi is becoming the next step for TradFi.
The biggest game this cycle is whether Vaults, after absorbing enough capital, will trigger the establishment of a risk-free rate.
During DeFi Summer, TVL was the decisive metric. Capital volume mapped to token wealth multipliers, fueling mining, airdrops, studios, and Binance Alpha. The core logic was that “projects need more capital to support token growth.”
However, Vaults now face strong deposit demand but can’t support their own tokens. Even if Morpho grabs more market share from Aave, it can’t trigger token surges.
Looking further, Hyperliquid versus Binance, Lighter versus Hyperliquid—their market sizes and token prices are significantly inverted. This is a major shift unprecedented in DeFi.
On one hand, old infrastructure continues to drain value. For example, after the listing effect disappears, $BNB should decline, but CEXs still have far more users than the entire on-chain + DeFi ecosystem. Ironically, exchanges are the only place with retail users, while DeFi protocols like Aave and Morpho have become the domain of a few professionals.
In this context, the high risk of Vaults and Curators comes from code and structure:
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Curve’s immutable contract programming language caused issues, and the xUSD team minted tokens unilaterally
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Aave ended the superficial harmony between DAO and development teams, and Re7 dealt a blow to on-chain asset management credibility
So, where does the high yield of Vaults and Curators come from?
It’s not from regulatory arbitrage, HLP fees, or token incentives, but many remain fixated on these three, believing that compliance in traditional finance creates too-big-to-fail credibility.
They completely forget that token economics have already collapsed, yet Vault deposits keep growing. Sky is deeply integrated into the Morpho system, and Aave V4’s future is both institutional and modular.
Moreover, this article repeatedly emphasizes that Vaults’ capital scale hasn’t triggered any price inflation mechanism. This is the structural dilemma of Vaults.
Vault yields essentially come from the trading efficiency of global markets. If CEXs don’t offer certain Vaults, then on-chain allocation becomes necessary, and personalized Curators are well suited to navigate among diverse participants.
Even in TradFi’s global markets, such as US stocks, opening accounts, trading times, and process restrictions are lengthy. It’s not as if the gradual move to 24/7 trading and DTCC on-chain is just for arbitrage, right?
The final question: What mechanism can trigger asset price inflation and create legendary market multiples from Vault deposits?
In other words, what’s missing between Vaults and asset price inflation?
Channels are missing—channels for capital coupling. Personalized Curators hinder the composability of DeFi Lego blocks.
Currently, CEXs act as placeholders, still the fastest intersection for capital.
Referencing Perp DEX evolution, capturing CEX contract market share, and RWA funding sources—all are competing for CEX’s market.
CEXs only have stock; they can’t solve user acquisition issues, let alone help Vaults reach hundreds of millions of users. Vaults start out as white-label products, but will eventually need to build their own super factories.
I speculate channels will take the form of some kind of Broker product.
With increasing specialization, exchanges—super apps integrating deposits/withdrawals, trading, custody, and clearing—will gradually split into separate businesses. Binance’s Abu Dhabi ADGM compliance framework is already divided into three segments.
This fundamentally improves the professionalism of capital handling, leverages blockchain’s unified ledger, and requires Vaults and Curators to coordinate centrally.
Referencing Neobrokers like Robinhood and Trade Republic, which attract younger, retail users to professional trading and then build asset management and wealth management business models, the stablecoin-as-frontend, Curator-managed Vault approach is more efficient.
In summary, Binance monopolizes capital flows, BNB gains maximum empowerment, and Brokers will handle capital interaction. Certain asset forms—or even pure business flows—are highly profitable. After all, Robinhood is just a lucrative market maker in disguise.
Conclusion
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Compared to code and trading, regulation and tokens appear more stable.
Private credit and RWA cycles are interrupted, and the rush to issue Document 402 feels prophetic. DeFi isn’t incapable of serving as a liquidity exit channel, but it lacks a mechanism for asset price inflation.
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Asset Management ≈ Aave/Morpho, will slowly become like public chains, ending their historic mission. They’ll persist long-term, but only see scale growth and stable token prices;
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Vaults & Curators ≈ Star fund managers, rapidly acquiring clients and monopolizing the market. Signs of industry giants are emerging, but whether they can continue capturing high value is uncertain;
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Channels ≈ CEX (temporary), actually have the most room for innovation, enabling capital freedom, and will always receive the highest rewards.
A highly efficient global market is now running on public chains without traditional tokens. This is the challenge for the next era, and everyone must answer it.
Statement:
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This article is reprinted from [Zuoye Waibo Mountain], with copyright belonging to the original author [Zuoye Waibo Mountain]. If you have any objections to this reprint, please contact the Gate Learn team, who will handle it promptly according to relevant procedures.
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Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute investment advice.
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Other language versions of this article are translated by the Gate Learn team. Without mentioning Gate, do not copy, distribute, or plagiarize translated articles.
