Bitwise Launches First On-Chain Vault on Morpho Protocol

Bitwise has made a significant entry into decentralized finance (DeFi) by launching its first on-chain vault, which enables investors to earn yield directly on the blockchain using the Morpho protocol. The announcement was made on January 26, highlighting a product that is a non-custodial vault strategy curated by Bitwise while being executed entirely on-chain. This means users maintain control of their funds while Bitwise facilitates the capital deployment across various lending markets.

Key Takeaways

Bitwise has introduced its first on-chain vault, allowing direct yield earning through the Morpho protocol.
The vault utilizes a non-custodial strategy, enabling users to maintain control of their funds.
It focuses on stablecoins, with targeted annual returns of up to 6%.
This launch signifies Bitwise's shift from traditional financial products to blockchain-based tools within DeFi.
The company intends to explore more strategies as DeFi becomes a core part of asset management infrastructure.

Bitwise launches its first on-chain vault on Morpho protocol

Understanding Non-Custodial On-Chain Yield

The initial vault primarily focuses on stablecoins, starting with USD Coin USDC usdc0.02%. It is designed around overcollateralized lending pools on Morpho morpho4.72%. According to Bitwise, the strategy aims to achieve annual returns of up to 6%, depending on current market conditions.

"Finance is moving on-chain. Vaults are key to this evolution, providing investors with a clear method to earn digital yield on their assets. Today, we’re thrilled to announce that Bitwise is launching non-custodial vault strategies as a curator on @Morpho."
— Bitwise (@BitwiseInvest) January 26, 2026

When funds are deposited into the vault, they are assigned to lending markets where borrowers put up extra collateral, minimizing counterparty risk. All positions within the vault are visible on the blockchain, meaning there is no requirement to transfer custody to Bitwise or any centralized service.

Jonathan Man, CFA, who leads Bitwise’s multi-strategy solutions group, oversees the strategy design and ongoing risk management. Bitwise has emphasized that the vault builds on its extensive research, trading, and risk frameworks created over years of managing cryptocurrency investment products.

Bitwise's Shift into DeFi Infrastructure

The Morpho vault is a significant step for Bitwise, marking its foray into non-custodial decentralized finance strategies. Previously, the firm was renowned for its exchange-traded products and research aimed at traditional investors. Now, this launch showcases a transition toward developing on-chain tools instead of solely providing investment exposure through regulated channels.

Morpho has gained popularity as a platform for such structures, empowering professional managers to create tailored lending strategies while using standardized smart contracts. Bitwise views on-chain vaults as an essential component of the market and is planning to explore further strategies in the future.

While the firm has not released specific timelines for future expansions or performance data, it describes this launch as an initial move within a broader on-chain strategy roadmap. As more capital shifts toward blockchain-based finance, Bitwise's entrance indicates that asset managers increasingly consider DeFi as a fundamental infrastructure rather than just an experimental avenue.